The graphs above show the production possibilities curves for the U.S. and Canada, which both produce cars and wheat. Based on the graphs above, which of the following is true?
A) The opportunity cost of a car in the U.S. is 1 unit of wheat.
B) The opportunity cost of a car in the U.S. is 5 units of wheat.
C) The opportunity cost of a car in Canada is 1/2 unit of wheat.
D) The opportunity cost of a car in Canada is 2 units of wheat.
A
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Vertical relationships can increase profits through
a. preventing firms from evading regulation b. eliminating a double-markup problem c. making the incentives of manufacturers and retailers unaligned d. preventing price discrimination
Which of the following is the best example of an investment in human capital?
a. an increase in the number of hours worked per week by a worker in an unskilled laboring job b. the purchase of company stock by a worker c. a summer internship at a law firm for someone going to law school d. payments into a retirement pension plan by a skilled laborer
When federal government spending amounts to less than tax revenues, the federal government runs a budget deficit.
Answer the following statement true (T) or false (F)
If the demand for school ball caps is inelastic, an increase in price will result in:
A. a decrease in profits. B. an increase in total revenue. C. a decrease in total revenue. D. an increase in the quantity demanded.