If an economy's GDP falls, then it must be the case that the economy's
a. income and saving fall.
b. income and market value of all production both fall.
c. income falls and market value of all production rises.
d. income rises and market value of all production falls.
b
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When the demand for a product falls, why do costs of production go down in an increasing cost industry?
Taxing cigarettes is:
A. an example of a pricing nudge. B. an example of an advantageous default option nudge. C. not a nudge. D. an example of an information nudge.
The table above gives the total cost information for a perfectly competitive firm. What is the profit-maximizing quantity of output?
a. 4 b. 6 c. 3 d. 5
Suppose that Greece and Portugal are both engaged in the production of grapes and figs, and that Greece has an absolute advantage in the production of both goods. If Portugal has a lower opportunity cost for producing figs, then
A. Greece has a comparative advantage in the production of both goods. B. Portugal has a comparative advantage in the production of figs, and specialization and trade between the two countries can be mutually beneficial. C. Portugal has a comparative advantage in the production of figs, but it is outweighed by Portugal's absolute advantage in fig production. D. Portugal has a comparative advantage in fig production, but there will be no gains from specialization and trade.