Comparative advantage is
A) the ability to produce more output from given inputs than another producer can.
B) the ability to produce a good at a lower opportunity cost than other producers.
C) the ability to produce more output of all goods than anyone else can.
D) the ability to produce all goods at lower costs than anyone else can.
Answer: B
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The directive of prompt corrective action means that
A) the FDIC will intervene earlier and more vigorously when a bank gets into trouble. B) the banks must take actions quickly to resolve reserve disputes. C) bank failures cannot occur. D) there must be an immediate response to an increase in interest rates.
Many environmentalists have advocated a substantial increase in the gasoline tax to cut down the federal deficit and to reduce pollution due to auto emissions. Such a tax increase would be devastating to people who commute significant distances to work. In fact, it would provide an incentive to relocate closer to work or change jobs. Economists refer to such effects of taxes as the
A. burden of a tax. B. regressive incidence of a tax. C. incidence of a tax. D. excess burden of a tax.
Explain how a successful advertising campaign will affect the demand curve for the product being advertised.
What will be an ideal response?
Historically, price discrimination was considered illegal in all instances. More recently, antitrust authorities have discovered that
A) price discrimination can increase the coverage of a market thereby increasing welfare. B) price discrimination limits the coverage of a market thereby increasing welfare. C) price discrimination limits the coverage of a market thereby decreasing welfare. D) price discrimination can increase the coverage of a market thereby decreasing welfare.