Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good. This economy:
A. should not change its production because it cannot improve its allocation by shifting
resources.
B. can improve its allocation by lowering the unemployment rate.
C. can improve its allocation by producing more of one good and less of the other.
D. can improve its allocation by producing more of both goods.
Answer: C
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In Figure 4-9 above, suppose LMA shifts to LMB. The distance from points A to L tells us
A) the change in income given zero interest responsiveness of Ap. B) the change in income resulting from the interest rate falling to its value at point B?. C) how much the money supply increased in producing the LM shift. D) the change in income that by itself raises the demand for money by as much as the money supply rose.
Which of the following best represents management's objective(s) in utilizing demand analysis?
a. it provides insights necessary for the effective manipulation of demand b. it helps to measure the efficiency of the use of company resources c. it aids in the forecasting of sales and revenues d. a and b e. a and c