A country is said to have an absolute advantage in the production of a good when:
a. its opportunity cost of producing the good is lower than another country.
b. it can produce the good using fewer resources than another country.
c. it specializes in the production of the good.
d. all of these.
b
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The Federal Reserve pursued an expansionary monetary policy during 1964 in order to
A) pull the United States out of a deep recession. B) counteract the effects of a deep cut in federal income taxes. C) keep interest rates from rising. D) bring down the inflation rate.
Which of the following accounts for the largest percentage of spending by households in the United States?
a. durable goods b. nondurable goods c. services d. insurance payments e. underground activities (e.g., illegal activities)
As the price of a good increases:
a. that good will yield less satisfaction per dollar than before. b. consumers will have more real income to spend on other goods. c. the quantity demanded of that good will also increase. d. the utility-maximizing quantity of that good willl not change. e. consumers will buy the good and substitute away from other goods.
Consider a graph of a production possibilities curve. If a producer is operating at an inefficient point, then that producer:
A. must be at an unattainable point on the production possibilities curve. B. can produce more of one good without producing less of the other good. C. must be specializing in activities for which it has a comparative advantage. D. cannot produce more of one good without giving up some of the other good.