Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity
a. True
b. False
Indicate whether the statement is true or false
True
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A market demand curve can be constructed by
A) adding the prices all consumers will pay for any given quantity. B) adding the quantities that all consumers buy at each price. C) adding the quantities that a consumer buys at the highest price. D) None of the above answers is correct.
Assuming a 5-percent decrease in both the nominal (money) wage and 5-percent increase in the price level in the classical model, then
a. both the quantity supplied and demanded of labor will increase. b. the quantity supplied of labor will increase and the quantity demanded of labor will decrease. c. both the quantity supplied and demanded of labor will decrease. d. the quantity of labor supplied and demanded would remain constant.
The above figure shows the isoquants for the production of steel. In which regions of production are there increasing, decreasing, and constant returns to scale?
What will be an ideal response?
In a competitive market, profit can be considered a reward to businesses that
a. produce a good that consumers value more highly than its component resources. b. reduce the value of resources used as inputs in production. c. prohibit rival firms from entering the market and competing. d. control costs, rather than following the wishes of consumers when deciding what products to produce.