Figure 18.2Refer to Figure 18.2. Macadamia has a comparative advantage in the production of:
A. fishing poles.
B. spears.
C. both spears and fishing poles.
D. neither spears nor fishing poles.
Answer: A
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The principle of ________ is that the economic cost of using a factor of production is the alternative use of that factor that is given up
A) marginal cost B) normative economics C) entrepreneurship D) opportunity cost
The percentage change in quantity demanded that results from a 1 percent change in price is known as the:
A. cross-price elasticity of demand. B. income elasticity of demand. C. price elasticity of supply. D. price elasticity of demand.
Which of the following statements concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct?
A. TP reaches a maximum when the MP of the variable input becomes zero. B. AP continues to rise so long as TP is rising. C. AP reaches a maximum before TP reaches a maximum. D. MP cuts AP at the maximum AP.
If the price of good A increases from $15 to $20 per unit and quantity demanded falls from 150 to 100 units, then by using the method of average values, we can calculate the absolute price elasticity of demand to be
A. 0.75. B. 2.4. C. 2.6. D. 1.4.