The law of increasing additional cost occurs when
A) there are always shortages in some goods.
B) technology is not used.
C) resources are not perfectly adaptable for alternative uses.
D) there are always alternatives and it is costly to figure out which alternative is best.
Answer: C
Economics
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Assume that banks do not hold excess reserves, all deposits remain in the banking system and that the required reserve ratio is 20%. If one bank obtains excess reserves of $10,000, then the maximum increase in money supply is
A) $10,000. B) $20,000. C) $40,000. D) $50,000.
Economics
Using the cash balance approach with k = 1/2 and GDP equal to $600 billion, cash balances must be equal to
A) $1200 billion. B) $600 billion. C) $300 billion. D) More information is needed to answer this question.
Economics