Explain how it might be possible to discuss costs of production of a good or service without using monetary values
What will be an ideal response?
All costs are essentially opportunity costs. That is to say that it is simply the value of the next best available alternative. Therefore, it is possible to discuss costs without mentioning monetary costs by analyzing what was given up to produce a good or a service.
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A country has an absolute advantage in the production of a good if that country
a. can produce the good using fewer resources than another country would require b. has the lowest opportunity cost of producing the good and can produce it with the fewest resources c. has the lowest opportunity cost of producing the good regardless of whether it is produced with the fewest resources d. has the greatest opportunity cost of producing the good regardless of whether it is produced with the fewest resources e. has the greatest opportunity cost of producing the good and produces it with the fewest resources
Greater equality in income is supported by the argument that it
A. Increases incentives to work for low-income earners. B. Increases horizontal equity. C. Strengthens the link between effort and reward. D. Stimulates consumption.
Why is NAFTA controversial? Briefly describe both sides of this controversy
What will be an ideal response?
Which of the following Fed actions will increase the money supply?
A) open market purchases of Treasury notes B) an increase in the required reserve ratio C) an increase in the discount rate D) all of the above E) none of the above