In the above figure, the opportunity cost of moving from point D to point C is
A) 20 guitars.
B) 50 ukuleles.
C) 55 guitars.
D) 25 ukuleles.
D
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Changes in the demand for an industry's output are felt most by those factors that
a. are inelastically supplied. b. are paid the highest factor prices. c. earn relatively little economic rent. d. have a sizable number of alternative uses.
Which of the following best illustrates the fallacy of composition?
a. If Jamal had more money, he could afford to buy more goods. b. If Aisha stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game. c. If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise. d. High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing.
If only a few people are affected by an externality, then it is likely that
a. the government will play a role in collective action. b. command-and-control regulation will provide the most efficient solution to the externality. c. a private solution to the inefficiency will occur. d. a private solution will be very difficult to negotiate.
Assume a country agrees to a free-trade act with another country. In the process, some individuals are displaced from their jobs, thus the free-trade act results in a negative externality
A) False B) True C) Only if those who were displaced are not compensated with another job or income transfer. D) Only if those who were displaced were compensated with another job or income transfer.