One can tell that Figure 8.4 shows short run costs because:
A. the slope of total costs and variable costs are the same.
B. costs are rising.
C. total costs are positive when output is zero implying fixed costs.
D. All of these.
Answer: C
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The principle that individuals and firms pick the activity level where the incremental benefit of that activity equals the incremental cost of that activity is known as the
A) spillover principle. B) principle of diminishing returns. C) principle of opportunity cost. D) marginal principle.
If your wealth is held as currency or in checking accounts, or other assets that you can convert to money on short notice, your assets are considered to be
A) abundant. B) interest bearing. C) liquid. D) fast moving.
Which of the following does NOT explain why developing countries encouraged new manufacturing industries of their own in the mid 20th century?
A) They were cut off from traditional suppliers of manufactures during WWII. B) Former colonial areas had something to prove; they wanted to attain the same income levels as their former rulers. C) Leaders of these countries feared that their efforts to escape poverty would be doomed if they continues to specialize in primary commodity exports. D) There was political pressure to protect these industries. E) Developing countries ran out of the natural resources that traditionally made up the majority of their trade.
A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is
A) false since it ignores the workers who lose their jobs as result of international trade. B) false since not all countries participate in international trade. C) true because it refers to countries; individuals may be losers as a result of international trade. D) true because all consumers and workers benefit from international trade.