Refer to the graph below.
As you move from point A to point B:
A. production efficiency is decreased because we are no longer on the production possibility curve.
B. production efficiency is decreased because we have less of good Y.
C. the change in efficiency is unclear.
D. production efficiency is increased because we have more of good X.
Answer: A
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Which of the following statements is (are) correct? In the classical system,
a. aggregate demand is the primary determinate of the natural rate of output and employment. b. both output and employment are self-adjusting towards the natural rates of output and employment. c. changes in aggregate supply drives changes in output in the short-run and in the long-run. d. only output is self-adjusting to the supply-determined full-employment levels.
Suppose an exhaustible resource can be sold only this period or in the next period. The marginal cost of extraction is constant and equal to $5. The current year price of the resource is $55, respectively. The interest rate is 10%. What is the minimum next year price required to make the sale of the resource profitable next year?
A) $55 B) $60 C) $65 D) $75