When the more-is-better principle holds, we assign higher utility values to indifference curves:
A. that are closer to the origin.
B. that are farther from the origin.
C. that are concave.
D. that are L-shaped.
B. that are farther from the origin.
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The net increase to total surplus when a positive externality is corrected is due to:
A. the transfer of surplus from those affected by the externality to the consumer. B. the increased number of units bought and sold in the market. C. the transfer of surplus from the consumer to those affected by the externality. D. None of these statements is true.
Which of the following is true of the production possibilities curve?
a. It assumes a fixed level of technology. b. It assumes resources are fixed. c. It assumes resources are fully employed. d. All of these are correct.
Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?
A) 5 percent B) 3 percent C) 8 percent D) 7 percent E) 4 percent
Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes. Which of the following groups would be worse off if these countries specialize and trade?
A. All groups are better off when specialization and trade take place. B. Mexican tomato producers. C. Brazilian coffee producers. D. Mexican coffee producers.