The production possibilities curve
A. Represents the different quantities of goods society can consume while operating at full employment.
B. Tends to increase as the population grows.
C. Must shift outward every year.
D. Is another name for the aggregate demand curve.
Answer: B
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A company facing the problem of moral hazard decided to lay off some workers during a recession, instead of lowering wages. What is the possible reason behind such a decision?
What will be an ideal response?
The table above gives the demand schedule for peas. Between point C and point D, the price elasticity of demand is
A) elastic. B) unit elastic. C) 0.75. D) 3.00.
If the cross-price elasticity between goods X and Y is zero, we know the goods are:
A. independent. B. substitutes. C. inelastic. D. complements.
A poverty trap is:
A. what develops when poor nations save "too much." B. what develops when nations devote too much to foreign aid and not enough to domestic poverty. C. a self-reinforcing mechanism that causes the poor to stay poor. D. the lowest quartile of income earners in a given country, because it is highly unlikely they will ever move out regardless of policy.