If two resources are highly substitutable for one another:
A. a decrease in the price of one will increase unit costs of production.
B. an increase in the price of one will increase the demand for the other.
C. an increase in the price of one will reduce the demand for the other.
D. a decrease in the price of one will increase the demand for the other.
Answer: B
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Jones and Smith are teaching assistants. Jones can grade 20 essays or 50 problem sets a day, while Smith can grade 20 essays or 10 problem sets a day. Therefore
A) Smith sacrifices 2 graded essays for every 2 problem sets she grades. B) Smith sacrifices 10 graded essays for every 20 problem sets she grades. C) Jones sacrifices 2 graded essays for every 5 problem sets he grades. D) Both Smith and Jones have a comparative advantage in grading essays.
Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is
A) Brand B plus Brand C. B) twenty dollars. C) Brand A. D) Brand B or Brand C, depending on which is considered the highest-value alternative forgone.
Which of the following is true about the fish market-day?
a. The quantity supplied of fish increases as price increases. b. The quantity supplied of fish decreases as price increases. c. The quantity supplied of fish does not change regardless of price. d. The quantity supplied of fish will adjust with changes in demand. e. The quantity supplied of fish decreases as price decreases.
Which of the following is most likely to increase exports?
a. a reduction in domestic political instability b. ending investment tax credits which subsidize domestic investment c. a reduction in the size of the government's budget surplus d. None of the above will increase exports.