Which of the following is the formula for the average product of labor?
A. F(L) - F(L - ?L)
B. F(L)/L
C. F(L)/?L
D. [F(L) - F(L - ?L)]/?L
B. F(L)/L
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Suppose the world economy is composed of just two countries: Italy and Greece. Each can produce steel or chemicals, but at different levels of economic efficiency. The production possibilities frontiers for the two countries are shown in the graphs below.
Assume that prior to specialization and trade, Italy and Greece preferred points I and G on their respective production possibilities frontiers. As a result of complete specialization according to comparative advantage, the resulting gains in total output will be
A. 10 units of chemicals. B. 5 units of steel and 15 units of chemicals. C. 25 units of steel. D. 15 units of steel and 5 units of chemicals.
Which of the following is a characteristic of an institution?
A) The institutions of a nation are permanent and cannot be changed over time. B) Institutions place constraints on the behavior of economic agents. C) Institutions are determined by individual opinions without considering the government's preference. D) Institutions have very little influence on a nation's economic prosperity.
Dividing the change in quantity on the horizontal axis by the change in quantity on the vertical axis calculates the slope of a line.
Answer the following statement true (T) or false (F)
Intermediate goods are
A. goods that are used up in the production of other goods in the same period that they were produced. B. either capital goods or inventories. C. capital goods, which are used up in the production of other goods but were produced in earlier periods. D. final goods that remain in inventories.