Efficiency is illustrated by
a. both the production possibilities frontier and the circular-flow diagram.
b. neither the production possibilities frontier nor the circular-flow diagram.
c. the production possibilities frontier only.
d. the circular-flow diagram only.
c
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Imagine that there are only two nations in the world, the United States and Mexico. If Americans buy more goods made in Mexico, other things constant, the
a. U.S. demand curve for Mexican pesos will shift rightward b. U.S. demand curve for Mexican pesos will shift leftward c. U.S. supply curve of Mexican pesos will shift leftward d. U.S. supply curve of Mexican pesos will shift rightward e. U.S. supply curve of Mexican pesos will shift upward
If the number of stages between input production and final product production increases then:
a. GDP and GNP both rise. b. GDP and GNP both fall. c. GDP and GNP both remain unchanged. d. GDP rises and GNP falls. e. GDP falls and GNP rises.
The change in the quantity consumed that is caused by a change in real income, with the relative prices held constant, refers to the:
A. substitution effect. B. income effect. C. equimarginal rule. D. law of diminishing marginal utility.
The International Nickel Company of Canada is often cited as an example of monopoly. What was the source of the barrier to entry that gave this firm monopoly power?
A) It was a public enterprise; therefore, the Canadian government blocked entry into the market for nickel. B) There were important network externalities in the production of nickel. C) Economies of scale resulted in the company becoming a natural monopoly. D) control of a key resource