How much the quantity of a good traded changes after a shift of the supply curve depends on
a. the size of the shift.
b. the slope of the demand curve.
c. whether the market is subject to price controls.
d. All of the above are correct.
d
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As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X
A) rises. The opportunity cost of one more unit of good Y also rises. B) rises. The opportunity cost of one more unit of good Y falls. C) falls. The opportunity cost of one more unit of good Y rises. D) falls. The opportunity cost of one more unit of good Y also falls.
Diminishing marginal utility means that as you consume more of a good, other things constant, the:
a. total satisfaction you obtain from consuming this good falls. b. total amount produced falls. c. marginal product falls. d. additional satisfaction you obtain from each additional unit of the good falls. e. total satisfaction you obtain from each extra good becomes constant.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The workers in Country B will benefit from trade if they:
A. specialize in bananas because they have an absolute advantage in banana production. B. specialize in tomatoes because their opportunity cost of tomatoes is higher than Country A's. C. specialize in tomatoes because their opportunity cost of tomatoes is lower than Country A's. D. specialize in bananas because they have a comparative advantage in banana production.
Exhibit 14-4 Aggregate supply and demand curves
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The increase in the price level as the economy moves from E1 to E2 in Exhibit 14-4 represents:
A. cost-push inflation. B. demand-shock inflation. C. wage push inflation. D. demand-pull inflation.