Economic profit provides an incentive for persons investing in human and physical capital to
a. undertake investment projects yielding an uncertain return.
b. discover and develop beneficial (productive) investment opportunities.
c. produce products that increase the value of resources.
d. do all of the above.
D
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Suppose that U.S. tastes for British goods increase. Then, in Figure 9-3
a. the supply curve shifts from S1 to S2 b. the supply curve shifts from S2 to S1 c. the demand curve shifts from D2 to D1 d. the demand curve shifts from D1 to D2 e. both demand and supply shift to the right
Refer to the above figure. The firm is operating using MRP0. An increase in productivity has occurred. The relevant curve for the firm after the increase in productivity
A) is MRP0. B) is MRP1. C) is MRP2. D) could be MRP1 or MRP2 depending upon whether the firm was earning a positive profit.
What mechanism assures that producers use inputs efficiently?
A. Governmental regulations determining the allocation of resources B. Altruism C. The desire for profit D. An innate desire to be efficient E. All of the responses are correct.
If a nation has no absolute advantage, then it
A) cannot gain from trade. B) still gains from trade. C) can only gain from trade if it raises its productivity levels. D) can only gain from trade if it reduces wages paid. E) can only gain from trade if it produces outside its production possibilities curve.