Refer to Figure 2-10. If the economy is currently producing at point E, what is the opportunity cost of moving to point B?
A) 26 thousand forks B) 60 thousand spoons
C) 0 spoons D) 20 thousand forks
C
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If society produces at a point inside the production possibilities frontier, it is characterized by full employment of resources.
Answer the following statement true (T) or false (F)
The purchasing power of one dollar is equal to _____
a. real GDP divided by nominal GDP b. nominal GDP divided by real GDP c. 1 minus the average price level d. the reciprocal of the average price level e. the implicit GDP deflator divided by the CPI
If the cross-elasticity of goods X and Y is negative, then the sales of X move:
A. in the opposite direction as the price of Y, and X and Y are substitute goods. B. in the opposite direction as the price of Y, and X and Y are complementary goods. C. in the same direction as the price of Y, and X and Y are complementary goods. D. in the same direction as the price of Y, and X and Y are substitute goods.
Assume that Economy A and Economy B have the same resources, but that individuals in Economy A have specialized whereas individuals in Economy B have not. Given this information, you can determine that
A) Economy A will have a higher output than Economy B. B) Economy A will have a lower output than Economy B. C) Economy A and Economy B will have identical outputs. D) individuals in Economy A will have lower incomes than individuals in Economy B.