(Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. If the economy is producing 8 cars and 12 computers per period:
A) the economy is still efficient but has made a decision not to buy as much as it could.
B) something must be done to reduce the amount of employment.
C) the notion of increasing opportunity cost is invalidated.
D) this is an attainable choice but involves unemployment or inefficiency.
D) this is an attainable choice but involves unemployment or inefficiency.
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A firm that is currently producing at a level of output where marginal revenue is greater than marginal cost can increase profits by producing one more unit of output
a. true b. false
Suppose you have a money income of $10 all of which you spend on Coke and popcorn. In the above diagram, the prices of Coke and popcorn respectively are:
A) $.50 and $1.00. B) $1.00 and $.50. C) $1.00 and $2.00. D) $.40 and $.50.
Suppose you pre-ordered a non-refundable movie ticket to Avengers: Infinity War. On the day of the movie you decide that you would rather not go to the movie. According to economists, what is the rational thing to do?
A) Since you do not want to go to the movie and the cost of the movie ticket is a sunk cost, how much you paid for the ticket should not influence your decision. B) You should not waste resources. Since you have paid for the ticket you should watch the movie. C) Your should go to the movie to minimize your losses. D) You should go to the movie to maximize your utility.
The case of New Zealand, described in the text, is concerned with the country's
A) prospects for long term growth. B) ability to sustain current account deficits. C) unproductive industrial sector and its prospects for long run growth. D) labor productivity. E) exchange rate volatility relative to other currencies.