A widget has an opportunity cost of 4 wadgets in Saudi Arabia and 2 wadgets in the United States. Given these opportunity costs, you would suggest that:
A. Both countries should produce an equal amount of each.
B. Saudi Arabia specialize in wadgets and the United States in widgets.
C. No trade should take place.
D. Saudi Arabia specialize in widgets and the United States in wadgets.
Answer: B
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If I buy 3 cups of coffee, paying $1 for each cup, and I would have been willing to pay up to $3 for the first cup, up to $2 for the second cup, and up to $1 for the third cup, then my consumer surplus is:
a. $6. b. $5. c. $3. d. $2. e. $1.
At the end of the day, Gracia's Pizza looks into the cash register to count up the day's total revenue. Another way of calculating its total revenue would be to find
a. price × average revenue b. price × marginal revenue c. price × quantity d. marginal revenue × average revenue e. marginal revenue × marginal cost
Farah is a policymaker for the government. If her goal is to increase the equilibrium quantity of loanable funds while raising real interest rates, what type of program should she pursue?
a. eliminate a saving incentive b. enact an investment tax credit c. eliminate an investment tax credit d. enact a saving incentive
When Acme Inc produces a certain amount of output by using the least amount of inputs, Acme Inc definitely
A) maximizes profits. B) minimizes labor costs. C) achieves technological efficiency. D) achieves economic efficiency.