One reason for international specialization in production is
a. a high tariff imposed by a national government
b. a low tariff imposed by a national government
c. diminishing returns to a variable factor of production
d. the different resource endowments throughout the world
e. high fixed costs of production
D
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If the domestic consumers of a good benefit from free trade, it suggests that the country:
A. is a net importer of that good. B. is not able to produce that good. C. is a net exporter of that good. D. has a comparative advantage in that good.
Allocative efficiency is achieved when the marginal benefit of a good
A) exceeds the marginal cost by as much as possible. B) exceeds the marginal cost, but not by as much as possible. C) is less than the marginal cost. D) equals the marginal cost. E) equals zero.
According to the quantity theory of money, a 10 percent increase in the quantity of money ultimately leads to a 10 percent increase in
A) real national income. B) real GDP. C) the price level. D) velocity.
A fishing boat owner sells her entire catch of 20,000 fish and maximizes profit that is equal to $7,000 . Suppose fish prices increase and you are asked to calculate her profit knowing that she now sells 30,000 fish. If fish prices increased by $3 per fish, what can you say about her new profit level?
a. profit > $90,000 b. profit < $97,000 c. profit < $90,000 d. profit > $67,000 e. profit > $10,500