Households receive their income in the circular flow diagram by
A) obtaining dividends and interest payments. B) selling the use of their property.
C) selling resources they own to business firms. D) selling the goods they produce at home.
C
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The above figure depicts the Edgeworth box for two individuals, Al and Bruce. Considering only the labeled points, point c is a possible equilibrium
A) only if it is the endowment. B) only if point a is the endowment. C) if either point a or b is the endowment. D) only if point d is the endowment.
Game theory is a separate model of oligopoly therefore it is of limited value when trying to generally understand firm level behavior
a. True b. False
If Country A can produce a good at a lower opportunity cost than Country B can,
a. there are benefits from trade b. Country A has an absolute advantage in producing the good c. economic efficiency has been achieved d. Country A does not have a comparative advantage in producing the good e. Country A can sell the good for a higher price abroad
When one country can produce a given amount of a good using fewer inputs than any other country,
A. Specialization will definitely increase worldwide production possibilities. B. It has an absolute advantage in producing the good. C. It always has a comparative advantage in producing the good. D. Specialization will definitely increase worldwide consumption possibilities.