What does the production possibilities frontier imply about the resource allocation?
A. Only some points on the curve are efficient.
B. All points on the curve are equally efficient.
C. A point that lies below the curve is more efficient.
D. A point that lies above the curve is readily achievable.
Answer: B
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Which of the following results in a movement along the supply curve of spinach but does not shift the supply curve of spinach?
A) disastrous weather that destroys half of this year's spinach crop B) a rise in the price of spinach C) an increase in wages for workers in spinach fields D) great weather that produces a bumper spinach crop this year
When a tax is justified on the basis that the taxpayers who pay the tax receive specific government services from payment of the tax, the tax
a. is considered horizontally equitable. b. burden is minimized. c. satisfies the benefits principle. d. is considered vertically equitable.