Wheat is being grown and sold at the lowest possible average cost. Which of the following does this situation illustrate?
a. Productive efficiency
b. Market elasticity
c. Allocative efficiency
d. Perfect competition
a. Productive efficiency
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The empirical evidence on purchasing power parity over the long run seems to point out that:
A. the theory of purchasing power parity cannot explain long-run changes in exchange rates. B. the higher a country's inflation rate the greater is the depreciation in the country's currency. C. the higher a country's inflation rate, the greater is the appreciation in the country's currency. D. there isn't any clear link between inflation rates and exchange rates.
Protectionism is best defined as
A. reducing barriers to trade in order to protect firms that export to other nations. B. using tariffs, quotas, or other barriers to trade to protect domestic jobs. C. using low-cost loans from the government to encourage industries to offshore their operations to other nations. D. protecting workers from layoffs by subsidizing industries in danger of reducing their workforces.
Suppose that the basket of goods purchased by the typical consumer costs $188.80 this year and it cost $160 in the base year. The CPI this year would be
A) 28.8. B) 85.11. C) 118.0. D) 348.8.
Which of the following statements best defines private costs?
A) They are internal in the sense that the buyer or seller must explicitly take them into account. B) They are costs borne by people other than those who commit the action. C) They are synonymous with social costs. D) They represent explicit costs incurred by producers in the private sector.