A production possibilities frontier is a line or curve that:
A. explains why societies make the choices they do.
B. shows the best combinations of outputs that can be produced using all available resources.
C. shows all the possible combinations of outputs that can be produced using all available resources.
D. shows what can be produced when all available resources are efficiently used.
Answer: C
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You consume only steak and lobster. Your substitution effect from a drop in the price of lobster is measured by a movement along your indifference curve between steak and lobster
Indicate whether the statement is true or false
Assume that the lost output due to tax distortions is proportional to the square of the tax rate
If the average cost of the distortion created by taxes is currently $1000, and the tax rate is increased from 40% to 50%, the average cost of the distortion created by taxes will increase to A) $383.33. B) $450.00. C) $640. D) $1562.50.
If inflation was zero percent, nominal interest rates would be:
A. larger than real interest. B. equal to real interest rate. C. at the optimal rate. D. smaller than real interest.
Which one of the following was a basic economic conflict between the North and the South in the years preceding the Civil War?
A. The North opposed the high protective tariffs the South supported to protect its manufactured goods. B. The South opposed the high protective tariffs the North supported to protect its manufactured goods. C. The North demanded the abolition of slavery. D. The North opposed the building of a transcontinental railroad.