Demand-pull inflation is caused:
a. by increases in production costs.
b. by increases in tax rates by the government.
c. by trade unions' pressure for wage hike.
d. when spending increases in an economy producing at its maximum capacity.
e. when increases in the supply of goods are exactly offset by increases in spending.
d
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Assume the price of beer is $4, the price of pizza is $10 and the consumer's income is $250. Which consumption bundle will NOT be the consumer's choice?
A) A (5 Beers, 5 Pizzas) B) B (0 Beers, 25 Pizzas) C) C (25 Beers, 15 Pizzas) D) None of the above bundles will be chosen.
Which of the following statements is NOT true about the price system?
A) The price system allows resources to flow from low-valued uses to high-valued uses. B) Firms have total control over what consumers can buy. C) Individuals have freedom to purchase what they want. D) The price system allows for economic efficiency.
The introduction of new technology causes
a. the production function to shift upward b. real output to decrease c. a decrease in the standard of living d. decreases in capital stock e. productivity to decrease
Which of the following statement is false?
a. Every economic choice has an opportunity cost b. Economic growth is illustrated as an inward shift of the production possibilities curve c. The production possibilities curve shows the maximum combination of two goods that an economy can produce