If a firm buys a building so as to have office space for its workers, the monthly opportunity cost of the building is best measured as
A) the monthly mortgage payment the firm must pay.
B) the price the firm paid divided by twelve.
C) zero.
D) the rent the firm could earn if it rented the building to another firm.
D
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In 1 hour, Robinson Crusoe can either shoot 4 birds or catch 4 fish. A typical native on a nearby island can either shoot 5 birds or catch 10 fish in an hour's time. Which of the following is true according to the doctrine of comparative advantage?
a. Crusoe will be better off if he specializes in either activity and then trades with the natives. b. The natives have a comparative advantage in both shooting birds and catching fish, so Crusoe cannot make himself better off by trading with the natives. c. Crusoe should concentrate on shooting birds and then trade with the natives to obtain fish. d. Crusoe should spend his time catching fish, and he should trade with the natives to obtain birds.
Suppose cars are taxed according to the amount of pollution they emit per gallon of gasoline consumed. We would expect to observe all of the following EXCEPT
A) an increase in quantity demanded of less-polluting automobiles and a reduction in quantity demanded of more-polluting automobiles. B) an increase in quantity demanded of more fuel-efficient cars. C) an increase in production of automobiles that were less polluting. D) an increase in the miles driven.
What is a utility possibility frontier?
Which of the following makes short-term conditional low-interest loans to LDCs?
a. Agency for International Development (AID) b. World Bank c. Agency for International Finance (AIF) d. International Monetary Fund (IMF)