What is the slope of the consumption schedule or consumption line for a given economy?
A. APS
B. 1 ? MPC
C. 1 ? MPS
D. APC
Answer: C
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Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that
A) there must have been technological advances in the way SUVs are produced. B) the "law of demand" does not hold true in this market. C) there must have movement leftward along the supply curve for SUVs. D) there must have been a rightward shift of the demand curve for SUVs.
Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Tom has a comparative advantage in ________ and Jerry has a comparative advantage in ________
A) cooking eggs; making sandwiches B) making sandwiches; cooking eggs C) neither of these activities; both activities D) both activities; neither of these activities
At a perfectly competitive firm’s profit-maximizing level of output, its total revenue is $200 and its short-run variable cost is $225. The firm
A. has a loss of $25. B. should shut down. C. should increase output to reduce losses. D. should raise the price of its product.
Comparative advantage indicates that:
a. specialization and exchange will permit trading partners to maximize their joint consumption. b. a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods. c. a nation can gain from trade only when its trading partners are not low-wage countries. d. countries should export products for which they are high-opportunity cost producers.