That each individual should engage in economic activities in which he or she is relatively more efficient is an application of the concept of
A) competition.
B) absolute advantage.
C) scarcity.
D) comparative advantage.
D
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A free good lacks the element of
a. usefulness. b. scarcity. c. transfer ability. d. tangibility.
Refer to Figure 13-13. If the diagram represents a typical firm in the market, what is likely to happen to its average cost of production in the long run?
A) It will probably fall since the firm must be cost efficient to remain competitive. B) It will probably rise since the firm will be producing less than its current amount. C) It will probably rise since its long-run demand is likely to be higher. D) It will probably fall since the firm will be selling less than its current amount.
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. An increase in the price of a product that is a close substitute for X will:
A. increase D, decrease P, and increase Q. B. increase D, increase P, and decrease Q. C. increase D, increase P, and increase Q. D. decrease D, increase P, and decrease Q.
If the CPI was 180 at the end of 2007, and 216 at the end of 2008, the inflation rate in 2008 was
A) 216 percent. B) 36 percent. C) 18 percent. D) 20 percent. E) 16.67 percent.