Assume that Nation A's production possibilities are either 30 units of bricks or 50 units of wheat. Nation B's production possibilities are 20 units of bricks and 40 units of wheat. Which of the following is true?
A. The high-cost producer of bricks is Nation A.
B. Nation A is the least-cost producer of wheat.
C. According to the principle of comparative advantage, Nation B should specialize in the production of bricks.
D. The opportunity cost of wheat production is lower in Nation B.
Answer: D
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One way investment banks differ from commercial banks is that investment banks
A) lend exclusively to households. B) do not take in deposits. C) only buy and sell mortgages. D) trade only in foreign exchange markets.
A monopolistic competitor exits the industry in the long run if ________
A) total revenue exceeds total cost B) total costs exceed total revenue C) marginal revenue exceeds marginal cost D) marginal revenue equals marginal cost
The old adage "rules are made to be broken" would typically be associated with economists who might advocate ________
A) stabilization policy B) monetary policy C) rule-determined policy D) discretionary policy E) fiscal policy
Figure 10-15
The economy's short-run (SRAS ) and long-run (LRAS) aggregate supply curves are shown in , along with three alternative aggregate demand curves and the accompanying equilibrium points. At which point will resource prices naturally tend to increase?
a.
A
b.
B
c.
C
d.
D