Choose the letter of the curve in Figure 1.2 that best represents a production possibilities curve for two goods that obey the law of increasing opportunity costs:
A. A.
B. B.
C. C.
D. D.
Answer: C
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In the 1980s the CEO of Coca Cola corporation found out that its core business was making roughly 15% rate of return on investor capital
However, he also discovered that some of the newly acquired subsidiaries were not making anywhere near that amount. He decided to ask each of these companies to come up with a plan to push the rate of return closer to the 15% mark or he warned that these companies might be sold. Why would the CEO sell off companies or operations that are still profitable?
Which of the following is not an advantage of starting a new business as a corporation?
A) separation of ownership and business liability B) possibility of double taxation C) ability to share risks D) enhanced ability to raise funds
The European Union became an economic union with the implementation of which treaty?
A) Treaty of Rome B) Single Europe Treaty C) Delor's Agreement D) Treaty on European Union E) Schengen Agreement
Widespread acceptance of the Keynesian theory of fiscal policy
a. caused most economists to reject the public choice view of budget deficits. b. relaxed the political pressure to balance the budget and, hence, paved the way for the persistent budget deficits of the last five decades. c. was based on the view that continual budget deficits would help stabilize the economy. d. increased the pressure for a constitutional amendment mandating that the federal government balance its budget.