What can we say about the employment of resources if the economy is at a point inside its production possibility frontier?
What will be an ideal response?
If the economy is at a point inside its production possibility frontier, this implies that there is either unemployment of resources or productive inefficiency.
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A firm sets its output where
A) marginal profit minus marginal cost equals zero (MP - MC = 0). B) marginal revenue minus marginal profit equals zero (MR - MP = 0). C) marginal revenue minus marginal cost equals zero (MR - MC = 0). D) marginal revenue minus marginal cost is greater than zero (MR - MC > 0)
Suppose a hefty rise in the demand for Mexican pesos creates a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
a. The government should impose a ban on Mexican exports. b. The government should devalue the peso. c. The government should print more pesos to increase its supply. d. The government should allow the peso to appreciate. e. The government should allow the peso to depreciate.
If a bank has a reserve ratio of 8 percent, then
a. government regulation requires the bank to use at least 8 percent of its deposits to make loans. b. the bank's ratio of loans to deposits is 8 percent. c. the bank keeps 8 percent of its deposits as reserves and loans out the rest. d. the bank keeps 8 percent of its assets as reserves and loans out the rest.
The demand for microwaves in a certain country is given by: D = 8,000 - 30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, and the government imposes a tariff of $30 per microwave, then the domestic quantity supplied will be ________ microwaves.
A. 4,800 B. 5,000 C. 4,000 D. 4,500