Countries gain from trade by producing:
A. the goods they produce at the highest opportunity cost.
B. the goods they can produce at the lowest opportunity cost.
C. all goods in equal amounts.
D. where the production possibility curve has a slope of -1.
Answer: B
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An externality can be a cost or benefit arising from the production of a good that falls upon
A) consumers but not producers. B) producers but not consumers. C) both the consumer and the producer. D) someone other than the consumer or producer.
In an open economy, the government purchases multiplier will be
A) smaller as the marginal propensity to consume increases. B) smaller as the marginal propensity to import increases. C) larger as the marginal propensity to tax increases. D) larger as the marginal propensity to import increases.
Which of the following observations is true?
A. The cost disease is most prevalent in low income countries. B. The cost disease affects public goods but not private goods. C. The cost disease is most prevalent in commodity markets. D. The cost disease occurs as the opportunity cost of labor increases.
Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine.
The private market equilibrium quantity is ________ doses per day.
A. 75 B. 100 C. 125 D. 50