What does the production possibilities frontier imply about the resource allocation?
A. Only some points on the curve are efficient.
B. All points on the curve are equally efficient.
C. A point that lies below the curve is more efficient.
D. A point that lies above the curve is readily achievable.
Answer: B
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The debit side of the current account includes the imports of
a. goods only b. goods and services c. services only d. services and resources only e. financial assets
A change in the required reserve ratio changes: a. the amount of actual reserves in the banking system
b. the amount of excess reserves in the banking system. c. the value of government securities held by the Fed. d. the level of insurance for banks who are members of the FDIC.
Refer to Figure 8.2 above. The total fixed costs for The Barber Shop are $3,000. If The Barber Shop produces 300 hair cuts, the average fixed costs are A) $.20. B) $5. C) $10. D) $100.
Local governments provide law enforcement, which benefits society, but if the costs of law enforcement exceed the benefits, the result is a situation of
A. Market failure. B. Government failure. C. Public choice theory. D. Efficiency as long as there is some benefit.