finala

2 the economic rationale for the law of increasing

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Unformatted text preview: IN A 3 POINT REDUCTION For Questions 1- 5: (A) is True. (B) is False. 1. Given full employment and optimal allocation, it is not possible for an economy capable of producing just two goods to increase its production of both at any one point in time. 2. The economic rationale for the law of increasing opportunity costs is that economic resources are fully adaptable to alternative uses. 3. A surplus indicates that the quantity demanded is less than the quantity supplied at that price. 4. Boeing 747, currently, is meeting its efficiency goals 5. Successful product improvement by one firm has little or no effect on other firms under monopolistic competition. 6. Which industry comes closest to being purely competitive? a) Shoes b) Electricity c) Automobile d) Wheat 7. Which is a normative economic statement? a) The consumer price index rose 1.2 percent last month b) The unemployment rate of 7.6 percent is too high c) The average rate of interested of loans is 4.6 percent d) The economy grew a...
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