The production possibilities frontier model assumes all of the following except
A) the level of technology is fixed and unchanging.
B) any level of the two products that the economy produces is currently possible.
C) labor, capital, land and natural resources are fixed in quantity.
D) the economy produces only two products.
B
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Suppose the equilibrium rent in Boston is $1,500. A rent ceiling of $1,600 per month leads to
A) a surplus of apartments in Boston. B) a shortage of apartments in Boston. C) no change in the Boston apartment market. D) fair prices in the Boston apartment market. E) compared to the situation at the equilibrium rent, a decrease in the quantity of apartments demanded and an increase in the quantity of apartments supplied.
If we assume perfect information, perfect mobility of resources, and no transactions costs, then there is little need for firms
a. True b. False