Country 1 produces two goods, A and B. Country 2 produces the same two goods. Currently, country 1 produces 100A and 200B and country 2 produces 300A and 700B. Which of the following statements is true?
A) If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too.
B) The PPF for country 1 is necessarily closer to the origin (or further to the left) than the PPF for country 2.
C) If country 1 is productive inefficient, then so is country 2.
D) Country 2 is operating on its PPF, but country 1 is clearly not operating on its PPF.
E) none of the above
E
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If doubling the quantity of inputs more than doubles the quantity of outputs, the firm is experiencing
A. increasing returns to scale. B. decreasing returns to scale. C. constant returns to scale. D. increasing costs per unit of output.
Landon goes shopping for a used car. One dealer provides a two-year warranty on all of its cars. What does the warranty do?
a. Signal that the dealer does not sell lemons. b. Signal that the car is probably a lemon. c. Allow the dealer to use adverse selection against Landon. d. Allow Landon to use moral hazard against the dealer.
One disadvantage of using the government to provide pure public goods is that everyone receives ________ of the public good and has ________ for the public good.
A. the same amount; a different reservation price B. a different amount; the same reservation price C. the same amount; the same reservation price D. a different amount; a different reservation price
A decrease in the interest rate will cause
A. the investment function to shift up. B. the investment function to shift down. C. planned investment spending to decrease. D. planned investment spending to increase.