As long as two people have different opportunity costs, each can gain from trade with the other, since trade allows each person to obtain a good at a price lower than his or her opportunity cost
a. True
b. False
Indicate whether the statement is true or false
True
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A market is allocatively efficient if
A) the sum of the consumer surplus and the producer surplus has been maximized. B) consumer surplus has been maximized. C) producer surplus has been maximized. D) profit has been maximized.
Refer to the table below. Relative to Free Cows, Happy Cows' marginal cost curve is ________, which makes its quantity produced ________ sensitive to changes in demand.
Happy Cows and Free Cows are two separate perfectly competitive dairy farms. The table above shows the respective firms' marginal cost at various production levels.
A) flatter; less
B) flatter; more
C) steeper; less
D) steeper; more
The Heckscher-Olin model uses differences in factor abundance to determine whether any nation has a comparative advantage in any good
a. True b. False Indicate whether the statement is true or false
If the aggregate supply curve is vertical, it follows that a change in
A) Real GDP can originate on the demand side of the economy. B) Real GDP can originate on the supply side of the economy. C) Real GDP can originate on either the demand side or the supply side of the economy. D) price level can originate on the demand side of the economy. E) b and d