What is mercantilism? What are the draw backs of this doctrine?
Mercantilism is a doctrine that holds that exports are good for a country, whereas imports are harmful. A country must import vital foodstuffs and critical raw materials that it cannot provide for itself. Mercantilists ignore a simple piece of arithmetic: It is mathematically impossible for every country to sell more than it buys, because one country's exports must be some other country's imports.
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Answer the following statement(s) true (T) or false (F)
1. Diminishing marginal returns is basically the same concept as decreasing returns to scale.. 2. The unit isoquant represents all possible ways of producing one unit. 3. If the wage and rental rates are $10 and $50 per hour respectively and an additional worker could produce 100 units of output in an hour, then an extra unit of capital could produce 500 units of output in an hour. 4. If the marginal product of labor is currently 40 units per hour and the marginal product of capital is currently 20 units per hour, then workers must be getting paid twice as much as capital per hour. 5. If all inputs are variable in the long run, then there cannot be decreasing returns to scale. But if some inputs remain fixed in the long run, then decreasing returns to scale can occur.
Economic theory is most useful in explaining the operation of social systems
A) aimed at making a living. B) directed toward the satisfaction of material wants. C) in the world of business and finance. D) in which participants characteristically don't know one another personally. E) in which people pursue selfish interests.
For small armies, a volunteer army would be less costly
a. True b. False
The amount by which actual output falls short of potential output is called: a. a deadweight loss
b. real GDP. c. a recessionary gap. d. the full-employment output. e. an expansionary gap.