Answer the following statements true (T) or false (F)
1) The law of increasing opportunity costs limits international specialization.
2) Answer the question on the basis of the following information. Assume that by devoting all its
resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its
resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. Alpha should specialize in Y and Beta in X.
3) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. The terms of trade will be at or within the 1X = 1½Y to 1X = 2 / 3 Y range.
4) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. Alpha would prefer terms of trade at, or close to, 1X = 1½Y.
1) T
2) T
3) T
4) F
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Spending on financial assets ________ counted as part of GDP ________
A) are not; because their purchase is not spending on goods or services B) are; as long as their purchase produces income C) are; because the cash exchanged represents an expenditure D) are not; because interest must be paid on them E) may be; as long as their value increases
In economics, the word "aggregate" refers to
A) the government. B) how individual households differ from each other. C) the public sector itself. D) an economy as a whole.
An increase in demand and a decrease in supply will lead to an
A) unambiguous increases in both price and quantity. B) unambiguous decreases in both price and quantity. C) an unambiguous increase in quantity, but the effect on price is indeterminate. D) an unambiguous increase in price, but the effect on quantity is indeterminate.
Winner-take-all refers to
a. top performers in a labor market receiving much more than those who are just slightly less productive b. computing and technology companies driving their competitors out of the market c. rich households paying less in taxes now than they did 30 years ago d. a negative income tax system that allows individuals to become superstars e. the Lorenz curve shifting closer to the diagonal as the rich become richer