This graph shows three different budget constraints: A, B, and C.
If Larry has budget constraint B in the graph shown, what is his opportunity cost of one gallon of milk?
A. It is less than one case of soda.
B. It is exactly one case of soda.
C. It is 6 cases of soda.
D. It is more than one case of soda.
Answer: A
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A portfolio of a range of stocks, bonds, and other investments helps an investor reduce the risk of investment.
Answer the following statement true (T) or false (F)
Damian shares a small food truck with his sister. His share of the expenses is $500 per month. He has decided to get his own, newer food truck which he will not have to share with anyone. His expenses for the newer truck are $1,400 per month. Damian is
as rational as any other person. As an economics major, you rightly conclude that A) Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. B) Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $900. C) Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $1,400. D) the cost of having one's own truck outweighs the benefits.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
According to international trade theory, a country can gain
a. if it protects domestic industries from low-wage foreign producers. b. only if the trade harms its trading partners. c. by importing goods when they can be obtained more economically from foreign producers. d. if it maximizes the employment in domestic industries that face competition from foreign producers who have lower costs.