Any movement along the production possibilities frontier involves the production of
a. more of both goods
b. more of one good and less of the other
c. less of both goods
d. more resources
e. better technology
B
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A new toll road was built in Southern California between San Juan Capistrano and Costa Mesa. On average, drivers save 10 minutes taking this road as opposed to the old road. The toll is $2; the fine for not paying the toll is $76
The probability of catching and fining someone who does not pay the toll is 90%. Individuals who take the road and pay the toll must therefore value 10 minutes at a minimum A) between $1.80 and $68.40. B) between $2 and $68.40. C) $1.80. D) between $1.80 and $76. E) more than $76.
When a government reduces its deficits by increasing taxes, in the short run,
A) output returns to potential. B) output increases. C) interest rate is higher. D) IS curve shifts inward to the left.