Nations specialize in production and engage in international trade in order to
A. protect domestic consumers and producers.
B. improve transportation.
C. increase employment.
D. increase consumption and income.
Answer: D
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"A perfectly competitive firm will shut down if the price falls below its average total cost." Do you agree? Explain
What will be an ideal response?
In the short run, why would a firm in a perfectly competitive market shut down production if the prevailing market price falls below the lowest possible average variable cost?
A. At that point (economic) profit is zero. B. Below that point average revenue becomes less than marginal revenue. C. Below that point marginal revenue becomes insufficient to pay for avoidable average variable cost. D. Below that point other firms with similar cost will find it profitable to enter the market and take away demand from the existing firms.
The table below shows the number of labor hours required to produce one gallon of wine and one pound of cheese in the United States and France. The opportunity cost of producing cheese in the United States is Labor hours to make:In the United StatesIn France1 gallon of wine4.001.001 pound of cheese1.002.00
A. 0.5 gallon of wine. B. four gallons of wine. C. one gallon of wine. D. 0.25 gallon of wine.
What "backs" the money supply of the U.S.?
A. The U.S. government's ability to keep the value of money relatively stable B. The amount of gold the U.S. government has on deposit at its banks C. The fact that currency is issued by the Federal Reserve System D. The fact that the intrinsic value of coins in circulation is greater than their face value