A country has a comparative advantage in a good if
A. It always has an absolute advantage in the production of the good.
B. It can produce more of the good than another country.
C. It can specialize only in two goods.
D. It can produce a good at a lower opportunity cost relative to another country.
Answer: D
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The "big tradeoff" refers to the point that governmental redistribution of income causes
A) less efficiency because it weakens incentives to work. B) less efficiency because it strengthens incentives to work. C) more efficiency because it weakens incentives to work. D) more efficiency because it strengthens incentives to work.
The utility function captures
A) how consumers interact. B) how an individual consumer ranks consumption bundles. C) how output is produced from labor and capital inputs. D) how happy a consumer is about a given consumption bundle.
If each taxpayer is obliged to pay the same tax—a fixed sum of money—then the tax is
a. progressive b. proportional c. income based d. poll or head based e. excise based
Recall the Application about the manufacture of fake killer whales used to scare sea lions off the Washington coast to answer the following question(s).Recall the Application. If a fake killer whale to be used to scare sea lions away from steelhead and other threatened and commercially valuable species cost $11,000 for the mold and $5,000 for materials for each fake killer whale made, then the producer would face:
A. increasing returns to scale. B. decreasing returns to scale. C. increasing average total costs. D. decreasing demand.