When Iceland can generate a product using fewer labor hours and resources than the United States, an economist would say that Iceland had
a. a comparative advantage in production of the product.
b. an absolute advantage in production of the product.
c. a higher opportunity cost of producing the product.
d. no incentive to import the product, regardless of the cost-price conditions for other products.
Answer: b. an absolute advantage in production of the product.
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If the Federal Reserve conducts open market ________, the money supply ________, shifting the LM curve to the left, everything else held constant
A) purchases; decreases B) sales; decreases C) purchases; increases D) sales; increases
Average variable cost is equal to total variable cost divided by quantity of output
a. True b. False Indicate whether the statement is true or false
According to the graph shown, if the government decides to increase taxes, it is most likely at equilibrium:
A. A B. B C. C D. D
Figure 7.5
The consumer must decide how to split $20 between spending and saving.Refer to Figure 7.5. If the consumer uses cognition to offset present bias, he/she will consume ________ now and save ________ to maximize utility.
A. $12; $8 B. $18; $2 C. $12; $2 D. $0; $20