According to the law of demand, a demand curve
A. Has a negative slope.
B. Has a positive slope.
C. Exceeds the economy's ability to produce.
D. Is a horizontal or flat line.
Answer: A
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Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?
A) 3/8 of a ton of coconuts B) 2/3 of a ton of coconuts C) 1 1/2 tons of coconuts D) 100 tons of coconuts
Free markets produce relatively high levels of efficiency but low rates of growth.
Answer the following statement true (T) or false (F)
The major sources of economic growth are
a. gains from trade, entrepreneurial discovery, and investment. b. high taxes, an expansion in the size of government, and restrictions on investments by foreigners. c. rapid expansion in the supply of money, trade restrictions, and government licensing of business activities. d. free and open elections and politicians who are willing to place the general welfare of the populace above their political ambitions.
A firm doubled all its inputs and experienced a 50% increase in output. If all input prices remain unchanged, the firm's long-run average cost exhibits:
A. economies of scale at the current output level. B. diseconomies of scale at the current output level. C. a constant long-run average cost at the current output level. D. diminishing marginal returns at the current output level.