Consider a society that is producing inside its production possibilities frontier. This society could best achieve efficiency in its production of output by:
A. increasing the levels of wages and prices.
B. producing relatively more capital goods and relatively fewer consumer goods.
C. fully employing all available resources.
D. distributing incomes more equally.
Answer: C
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In a perfectly competitive labor market, the wage rate paid by the individual firm is
A) the equilibrium market wage rate. B) dependent on the demand for the product. C) below the equilibrium market wage rate. D) a function of the tax system.
The price index was 150 in the first year, 160 in the second year, and 165 in the third year. Which of the following statements is correct?
a. The price level was higher in the second year than in the first year, and it was higher in the third year than in the second year. b. The inflation rate was positive between the first and second years, and it was positive between the second and third years. c. The inflation rate was lower between the second and third years than it was between the first and second years. d. All of the above are correct.
Suppose that for a given good demand increases and supply decreases at the same time. If demand increases by a lesser amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good
A) rises; falls B) falls; falls C) rises; rises D) falls; rises
Billy is deciding whether to watch TV at home or go spend time with his friends. If Billy decides to stay home, we can conclude that:
A. Billy will get more utility from watching TV than spending time with his friends. B. Billy's revealed preference is to always be alone. C. Billy is a homebody and never goes out. D. Billy will regret not spending more time with his friends.