If an economy is operating on its production possibilities curve, it is:
A) efficient and fully employed.
B) fully employed but not necessarily efficient.
C) efficiently producing but not necessarily fully employed.
D) inevitably going to grow in the future.
Ans: A) efficient and fully employed.
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Consider the two graphs above. Suppose that the domestic currency is expected to strengthen. This would ________ the desired level of the capital stock, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
If you were to start your own business, your implicit costs would include the:
A. opportunity cost of the time you spend working at the business. B. interest that you pay on your business loans. C. profit you earn over and above your normal profit. D. rent that you have paid in advance for the use of a building.