During periods of unemployment
A) the economy operates at a point inside the production possibilities curve.
B) the economy operates at a point outside the production possibilities curve.
C) the production possibilities curve shifts inward.
D) the production possibilities curve shifts outward.
Answer: A
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Which of the following is NOT an assumption of the behavior of exchange rates in the short run?
a. The adjustment period of time involves weeks rather than years. b. Market forces are irrelevant and "do not matter." c. Prices of goods adjust slowly and are therefore "sticky." d. Economic actors behave in their own self-interest.
Suppose Zia spends her time picking berries and apples. Her production set is described by the equation , where is the number of berries and y the number of apples. Which of the following statements will be true?
a. 25 apples and 10 berries is achievable but inefficient. b. 10 berries and 2 apples is efficient but unachievable. c. 20 apples and 5 berries is an inefficient level of production. d. 30 berries and 5 apples is an efficient level of production.