Supply curves are generally _______ sloping because _______________.
A. downward; more consumers will buy the good if the price falls.
B. upward; of the principle of increasing opportunity costs.
C. downward; it is less expensive to mass produce goods.
D. upward; of inflation.
Ans: B. upward; of the principle of increasing opportunity costs.
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Economist John Maynard Keynes once said, "In the long run, we are all dead." Keynes was likely:
A. in favor of using fiscal policy. B. against the use of fiscal policy. C. in favor of allowing the economy to always correct itself. D. Economy never achieves its long run equilibrium.
Efficiency in a market is achieved when
a. a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs. b. the sum of producer surplus and consumer surplus is maximized. c. all firms are producing the good at the same low cost per unit. d. no buyer is willing to pay more than the equilibrium price for any unit of the good.
If ability is positively related to schooling, then estimating the returns to education directly from the wage-schooling profile will likely
A. overestimate the average wage. B. underestimate the average discount rate. C. underestimate the return to schooling. D. overestimate the return to schooling. E. underestimate the average wage.
Assume a two-country, two-commodity, and two-input model. Let the two countries in this model be the United States and the Rest of the World and the two goods being produced by each of the countries be steel and wheat. The two factors of production used in producing the goods in each country are capital and land. If the United States is capital-abundant and wheat production is land-intensive, the Heckscher-Ohlin model would predict that the Rest of the World would
A. export steel and import wheat. B. export wheat and import steel. C. export both the goods to the United States. D. import both the goods from the United States.