Refer to Figure 2-2. At Point A in the production possibilities graph shown above, the economy:
A. is not using its resources efficiently.
B. is using its resources efficiently while producing clothing but no food.
C. is using its resources efficiently while producing food but no clothing.
D. is using its resources efficiently to produce both food and clothing.
A. is not using its resources efficiently.
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Refer to Figure 4-18. What is the size of the unit tax?
A) $8 B) $5 C) $3 D) cannot be determined from the figure
Refer to the above figure. Suppose that the supply curve shifts from SA to SB while the demand curve shifts from DA to DB. Which of the following is TRUE about the results of the shifts in the supply and demand curves?
A) The equilibrium price increases while the equilibrium quantity remains unchanged. B) Both the equilibrium price and equilibrium quantity increase. C) The equilibrium price remains unchanged while the equilibrium quantity increases. D) Both the equilibrium price and equilibrium quantity remain unchanged.