Question

1. Per class discussion, if injections exceed leakages;

   		GDP becomes zero.
   		GDP decreases.
   		GDP increases.
   		GDP remains unchanged.

2. The double-coincidence of wants is a problem with:

   		the financial markets.
   		Christmas.
   		barter.
   		money exchanges.

3. Marginal cost is the opportunity cost

   		of a good or service that exceeds its benefit.
   		that arises from producing one more unit of a good or service.
   		that your activity imposes on someone else.
   		of a good or service divided by the number of units produced.

4. The production possibilities frontier

   		represents (the production of) all possible combinations of any two goods or services that are technically (productively) efficient.
   		once applied to U.S. technology but now refers to Japanese technology.
   		refers to the technology used in such goods as computers and military aircraft.
   		is also called the supply curve.

5. A bowed outward production possibilities frontier occurs when

   		as more of a good is produced, producing additional units of it require greater reductions in the other good.
   		the society is operating on the production possibilities frontier.
   		resources are not scarce.
   		opportunity costs are constant.

6. Resource use is allocative efficient:

   		when the maximum possible quantity is being produced.
   		whenever marginal benefit exceeds marginal cost.
   		when marginal benefit equals marginal cost.
   		whenever marginal cost exceeds marginal benefit.

7. Individual economic decisions are coordinated by

   		markets through adjustments in prices.
   		government through adjustments in sales taxes.
   		markets through adjustments in sales levels.
   		government through adjustments in income taxes.

8. The term "market" refers to

   		physical structures only.
   		any arrangement that enables buyers and sellers to get information and trade with one another.
   		trading arrangements that have been approved by the government.
   		locations where buyers and sellers physically meet.

Answer 1

1. If injections exceeds leakages , GDP increases. Hence, option(C) is correct.

2. The double-coincidence of wants is a problem with barter. Hence, option(C) is correct.

3. Marginal cost is the opportunity cost of a good or service divided by the number of units produced. Hence, option(D) is correct.

4. The production possibility frontier represents all possible combinations of any two goods or services that are technically efficient. Hence, option(A) is correct.

5. A bowed outward production possibilities frontier occurs when as more of a good is produced , producing additional units of it require greater reductions in the other good. Hence, option(A) is correct.

6. Resource use is allocative efficient when marginal benefit equals marginal cost . Hence , option(C) is correct.

7. Individual economic decisions are coordinated by markets through adjustment in prices. Hence, option(A) is correct.

8. The term"market "refers to any arrangement that enables buyers and sellers to get information and trade with one another. Hence, option(B) is correct.