Given the production possibility tables for First and Second Bakeries shown, we can determine that:First BakerySecond BakeryCookiesPiesCookiesPies018091012306206603300900
A. Second Bakery has a comparative advantage in the production of pies.
B. First Bakery has a comparative advantage in the production of pies.
C. First Bakery has a comparative advantage in the production of both goods.
D. neither bakery has a comparative advantage.
Answer: B
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Suppose MRS does not equal MRT for all consumers. In this case, the economic outcome is not fully efficient because:
A) exchange is inefficient. B) the use of inputs in production is inefficient. C) the mix of outputs in inefficient. D) none of the above
If the Fed wanted to use all of its policy variables to increase the supply of money, which of following would it not do? a. Increase its open market purchases of government securities. b. Increase the required reserve ratio
c. Increase the interest rate it pays banks on bank reserves. d. It would not do b. or c.
Figure 3-18
Refer to . Which area represents the increase in consumer surplus when the price falls from P1 to P2?
a.
ABD
b.
ACF
c.
DEF
d.
BCFD