Answer the following statements true (T) or false (F)
1. If society has over-allocated resources to a particular activity, then the marginal benefits of the activity would be less than the marginal costs.
2. A nation's production possibilities curve shows the maximum combinations of resources that a nation can use.
3. A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outwards.
4. Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.
1. Answer: False
2. Answer: False
3. Answer: False
4. Answer: False
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Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit.
Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would: A. Increase from $40 to $90 and aggregate supply would decrease B. Increase from $50 to $60 and aggregate supply would decrease C. Increase from $60 to $70 and aggregate supply would increase D. Remain unchanged but aggregate supply would increase
The most widely used measure of income inequality is
A. the Bureau of Labor Statistics' cost-of-living index. B. the Laffer curve. C. the Gemini coefficient. D. the Lorenz curve.