The notion that specialization in goods that one can produce at a low opportunity cost will make it possible for trading partners to produce a larger joint output is called
a. the law of absolute advantage.
b. the law of comparative advantage.
c. the law of production possibilities.
d. the exchange maximum principle.
B
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In the above table, when 200 brownies are produced
A) marginal social benefit is greater than marginal social cost, and resource use is efficient. B) marginal social benefit is greater than marginal social cost, and there is a deadweight loss. C) marginal social benefit equals marginal social cost, and resource use is efficient. D) marginal social benefit is less than marginal social cost, and there is a deadweight loss.
Assuming we are considering a normal good, the calculated price elasticity of demand is:
A) always positive. B) always negative. C) positive if demand is elastic and negative if demand is inelastic. D) positive if demand is inelastic and negative if demand is elastic.
Assume the firms in an oligopoly produce a differentiated product and are initially colluding
If each firm begins to cheat (to increase sales) by underpricing the other firms, as the amount of cheating increases, the resulting industry price and output will approach the outcome for: A) perfect competition. B) monopolistic competition. C) noncooperative monopoly. D) noncooperative oligopoly.
Revenue is equal to
A) price times quantity. B) price times quantity minus total cost. C) price times quantity minus average cost. D) price times quantity minus marginal cost. E) expenditure on production of output.