The alternative combinations of goods and services that can be produced in a given time period with the available resources and technology is the:
A. Production possibilities.
B. Consumption possibilities.
C. International trade balance.
D. Comparative advantage.
A. Production possibilities.
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Assuming that resources are specialized, the opportunity cost of an item increases as the production of it rises. This implies that firms will produce more as
A. the price increases. B. the price decreases. C. the opportunity cost is greater than the price. D. government asks firms to produce more. E. the income of buyers increases.
Net capital outflow
a. is always greater than net exports. b. is always less than net exports. c. is always equal to net exports. d. could be any of the above.
Firms do not change prices frequently because:
A. there are legal prohibitions against doing so. B. it is easier to change the quantity of capital used in production. C. customers will refuse to patronize firms that change prices frequently. D. it is costly to do so.
Table 21.2Output (units per day)0102030Total cost (dollars per day)$40$54$62$80Average fixed cost at 20 units of output in Table 21.2 is
A. $1.00. B. $4.00. C. $2.50. D. $2.00.