Consumers have to make tradeoffs in deciding what to consume because
A) there are not enough of all goods produced.
B) the prices of goods vary.
C) not all goods give them the same amount of satisfaction.
D) they are limited by a budget constraint.
D
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Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) consumer surplus equals area(s)
A. A + B + C. B. E + F. C. A + B. D. A.
ISI policies were brought to an end primarily by
A) their inability to solve the crises of the 1980s. B) authoritarian governments interested in total control over the economy. C) populist politicians. D) the growing perception that they were creating long-term economic inefficiencies. E) Both A and D.
The law of diminishing returns explains why
a. monopolies have a guaranteed profit margin b. short-run MC and AVC curves are U-shaped c. the production possibilities curve is bowed out d. long run supply curves are downward sloping e. total product is a straight line
Explain the difference between absolute and comparative advantage, giving an example of your answer