The following table shows the units of output a worker can produce per month in country A and country B.
Country
Food
Electronics
Country A
20
5
Country B
12
4
The opportunity cost of a unit of electronics in Country B is
A. 3 units of food.
B. 2 units of food.
C. 5 units of food.
D. none of these.
Answer: A
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The curve in the above figure will shift to the right when
A) the price level falls. B) the proportion of the population that is elderly increases. C) population falls. D) technology increases.
According to the theory of comparative advantage; a good should be produced in that nation where
A. the production possibilities line lies further to the right than the trading possibilities line. B. its cost is least in terms of alternative goods that might otherwise be produced. C. its absolute cost in terms of real resources used is least. D. its absolute money cost of production is least.
How might Roger’s Plastics Company experience an adverse selection of patients for its health insurance plan?
a. by requiring all employees to be covered under the program b. by offering voluntary insurance, which ends up getting used only by people who know they are sick c. by requiring all participants to undergo extensive screening for conditions that make them ineligible d. by offering free insurance to all employees
Refer to Figure 3-4. If the price is $25,
A) there is a surplus of 300 units. B) there is a shortage of 200 units. C) there is a shortage of 300 units. D) there is a surplus of 200 units.