An outward shift in the entire production possibilities frontier
A. represents economic decline.
B. means that previous levels of production are now unobtainable.
C. means that the only way the economy can increase the production of one good is by producing less of an alternative good.
D. represents economic growth.
D. represents economic growth.
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From the perspective of economic theory, prices are basically
A) constant. B) information signals C) rising. D) rates of exploitation.
Figure 5-12
In Figure 5-12, if a consumer equilibrium moves from B to A, this shows that
A. beer is an inferior good, but wine is a normal good. B. wine is an inferior good, but beer is a normal good. C. both beer and wine are normal goods. D. both beer and wine are inferior goods.
If people care about relative consumption rather than absolute consumption, then:
A. there is little need for government intervention in markets. B. their choices will lead to an efficient allocation of resources. C. their behavior will be consistent with traditional economic models. D. individuals' decisions need not lead to socially optimal outcomes.
Which of the following is false?
A. The federal government's fiscal year begins on October 1. B. The largest federal government purchase of final goods and services is Social Security. C. The corporate income tax is a direct tax.