Commercial society provides incentives to specialize by
A) following one's comparative disadvantage.
B) pursuing one's comparative advantage.
C) producing somewhere outside the production possibilities frontier.
D) producing a narrowly defined good without an interest in the wealth it generates to the producer.
B
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What causes the production possibility curve to be bowed out?
What will be an ideal response?
If equilibrium is present in a market: a. there is either a shortage or a surplus
b. the quantity demanded equals quantity supplied. c. the quantity demanded exceeds quantity supplied. d. the quantity supplied exceeds quantity demanded.
Government agencies, such as the National Science Foundation, subsidize basic research because in the absence of a subsidy too little research would be conducted
a. True b. False Indicate whether the statement is true or false
Why is the term “bounded rationality” important to behavioral economists?
a. It disproves many of the principles of the traditional economic model, which have hindered economic progress. b. It proves that if consumers had unlimited access to information, they would always maximize their utility. c. It shows that reason alone cannot maximize utility; intuitions, hunches, and split-second decision making are also necessary. d. It addresses the erroneous assumption that humans have unlimited information-processing capabilities.