Based on the above figure, if countries "A" and "B" faced the production possibilities curves above, both countries would benefit if
A. they both produced both industrial and agricultural goods.
B. they did not trade.
C. "B" produced industrial goods, and "A" produced agricultural goods.
D. "A" produced industrial goods, and "B" produced agricultural goods.
Answer: D
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Diminishing marginal returns to labor means
A) that each additional worker costs more. B) that each additional worker produces less than the previous worker. C) that each additional worker costs less. D) that total product grows at a constant rate when workers are added to production.
Fixed costs for a firm are analogous to:
A. the dirt that fills up the financial hole. B. digging a deeper financial hole by producing when prices are too low. C. the cost of the shovel needed to fill the financial hole. D. starting out in a hole that represents economic losses if the firm produces nothing.
Health insurance companies impose deductibles on policies and co-payments on claims
A) to increase sales. B) to reduce moral hazard problems. C) to reduces sunk costs. D) to increase prices.
Answer the following statements true (T) or false (F)
1. Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture. 2. The price and income support programs for agriculture have given the most benefit to those farmers with the most need for the government assistance. 3. Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers. 4. Agricultural price support programs result in consumers paying lower prices for the product. 5. Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.