In a two-person, two-good economy, the gains to specialization will be larger when:
A. there are large differences between the individuals in their opportunity costs of producing the two goods.
B. there are small differences between the individuals in their opportunity costs of producing the two goods.
C. neither person has an absolute advantage.
D. one person has an absolute advantage in both goods.
Answer: A
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The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will
A) move to point such as Y. B) remain at point W. C) move to point such as X. D) move to point such as Z.
Discuss the correct and incorrect economic analysis in the following statements
"If a disease kills a large number of turkeys, the supply of turkeys will decrease. This will result in a price increase, which will then cause the supply of turkeys to increase."
According to the new classical view, changes in aggregate demand
a. can temporarily influence output b. affect only the aggregate price level. c. can influence output but at the cost of higher inflation. d. are primarily driven by changes in investment. e. Both a and c
The cost-output elasticity is used to measure
A) input substitution flexibility. B) the slope of the firm's expansion path. C) the slope of long-run average cost. D) the slope of long-run marginal cost. E) economies of scale.