Alex must prepare for exams in both biology and economics this week. Assume that the production possibilities curve showing the tradeoff between exam scores in biology and economics is concave toward the origin. As Alex moves along the curve spending more of his time studying for economics, the opportunity cost of an hour of preparation for economics:
a. increases.
b. remains constant.
c. decreases.
d. first increases then decreases.
Question 2
The real wealth and the real interest rate effects are both causes of the downward slope of the aggregate demand curve.
a. True
b. False
Indicate whether the statement is true or false
