Which statement is TRUE about a comparison of economic freedom with political freedom?
A) Economic freedom is more important than political freedom when considering positive economic growth.
B) Economic freedom leads to positive economic growth while political freedom leads to negative economic growth.
C) Political freedom is more important than economic freedom when considering positive economic growth.
D) Economic freedom cannot exist without political freedom.
A
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Constant returns to scale means that as all inputs are increased
A) total output remains constant. B) average total cost rises. C) average total cost rises at the same rate as do the inputs. D) total output increases in the same proportion as do the inputs.
When does an incomplete contract prove beneficial?
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.12 = 1 peso. Furthermore, suppose the price level in Mexico rises 25 percent while the U.S. price level remains constant. According to the purchasing power parity theory, what will be the equilibrium exchange rate?
A) $0.15 = 1 peso B) $0.09 = 1 peso C) $0.16 = 1 peso D) $0.096 = 1 peso
Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. Calculators Per HourComputers Per HourSmith10010Jones1206 Suppose Smith and Jones begin by producing 100 calculators per hour; as Smith and Jones choose to efficiently produce fewer computers and more calculators, ________ should devote more time to calculators because his ________.
A. Jones; opportunity costs are lower B. Smith; absolute advantage is larger C. Jones; absolute advantage is smaller D. Smith; opportunity costs are lower