In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production
a. True
b. False
Indicate whether the statement is true or false
False
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Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts
A) the horizontal intercept rightward and the vertical intercept upward. B) the horizontal intercept rightward but does not shift the vertical intercept. C) the vertical intercept upward but does not shift the horizontal intercept. D) neither the horizontal intercept nor the vertical intercept.
A requirement that the budget be balanced in each calendar year is a misguided overreaction to the fear that in some cases
a. budget surpluses can become too large. b. budget deficits can become too large. c. interest rates would rise. d. interest rates would fall.
Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. In a closed economy, who has the comparative advantage in catching fish?
A. Sheila and Jim B. Sheila C. Jim D. Neither of them
The Sweet Success Bakery sells 500 cakes at a price of $10 per cake. Its total economic costs for producing 500 cakes are $500. The Sweet Success Bakery's economic profits are
A. $100. B. $3,500. C. $4,500. D. indeterminate from this information.