Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has:
A. confused association and causation.
B. misunderstood the Ceteris paribus assumption.
C. used normative economics to answer a positive question.
D. built an untestable model.
Answer: A
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Firms are much more likely to provide non-excludable public goods than excludable public goods. ?
Answer the following statement true (T) or false (F)
Assume that transportation costs are especially high for Widgets in the two-country, two-product Ricardian model, and Country A enjoys a comparative advantage in Widgets, then
A) country B must also enjoy a comparative advantage in Widgets. B) country B may end up exporting Widgets. C) country A may switch to having a comparative advantage in the other good. D) country A will still export Widgets. E) Trade may be impossible between the two countries.
According to the table above, paper product production exhibits
A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) varying returns to scale.
In long-run equilibrium, a perfectly competitive firm's short-run marginal cost curve crosses the long-run average cost curve at the lowest point on the long-run average cost curve
a. True b. False Indicate whether the statement is true or false