From an isoquant map, one can illustrate diminishing returns to production by
A. constructing a positively sloped isoquant.
B. moving from isoquant to isoquant along a ray from the origin.
C. observing the slope of the isoquant as one moves outward on the labor axis but stays at the same point on the capital axis.
D. following the curvature of an individual isoquant.
Answer: C
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Suppose the price level falls. The result is that the:
A. aggregate supply curve would shift to the right. B. aggregate supply curve would shift to the left. C. general price level would rise causing a movement up the aggregate demand curve. D. aggregate demand curve would slope downward because of the real balances effect.
International trade is based on the existence of
A. comparative advantage. B. perfect advantage. C. productivity advantage. D. absolute advantage.
Most economists
A. favor both tariffs and quotas. B. consider tariffs less of an evil than quotas. C. consider quotas and tariffs of equal evil.
An example of a standardized good is:
A. iron. B. cereal. C. soda. D. pizza.