Refer to the graphs. These production possibilities curves:
A. demonstrate that there can be gains from specialization and trade between the two nations.
B. reflect the law of increasing opportunity costs.
C. reflect the law of diminishing marginal utility.
D. imply that specialization will be incomplete.
A. demonstrate that there can be gains from specialization and trade between the two nations.
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If Table 12.2 represents all the investments available to the economy, the nominal interest rate is 4.5 percent and there is no inflation, what will be the level of investment in the economy?
A) $200 B) $500 C) $600 D) $800
A PPF, such as the one above, that bows outward illustrates
A) decreasing opportunity cost. B) increasing opportunity cost. C) that technology is improving. D) that productivity is falling.
Moral hazard would lead to
a. Only risky drivers buying insurance b. More risky drivers buying more insurance c. Drivers taking on a lot more risk after buying insurance d. Drivers becoming a lot more careful after buying insurance
Assume Amanda always maximizes her total utility given her budget constraint. Every morning for breakfast she has two eggs and three sausages. If the marginal utility of the last egg is 10 utils and the price of eggs is $1 each, what can we say about the marginal utility of the last sausage if the price of each sausage is $2?
A. It must be equal to 20 utils. B. It must be equal to 5 utils. C. It must be equal to 1 utils. D. It must be equal to 10 utils.