If total output increases from $100 billion to $200 billion as population increases from 100 million to 150 million, then output per person:
A. doubles.
B. decreases
C. increases, but by less than 100 percent.
D. remains constant.
Answer: C
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Which of the following must be true in order to engage in advantageous international trade?
a. It must be producing at a point on its production possibilities frontier. b. It must be economically efficient. c. It must have a comparative advantage in producing one of the goods being traded. d. There must be no potential Pareto improvements available in the economy. e. It must have an absolute advantage in producing one good being traded.
An increase in the price of a complement for product A would:
a) Shift demand for product A out to the right. b) Shift demand for product A into the left. c) Shift supply for product A out to the right. d) Shift supply for product A in to the left.
The optimal method of production maximizes cost for a given level of output.
Answer the following statement true (T) or false (F)
If an average cost pricing rule is imposed on the firm in the figure above, the deadweight loss will be
A) zero. B) $150. C) $50. D) $250.