The specialized information-gathering activities that banks use to evaluate borrowers are an example of the:
A. principle of comparative advantage.
B. scarcity principle.
C. cost-benefit principle.
D. principle of increasing opportunity cost.
Answer: A
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In oligopoly pricing, firms are caught in a situation called prisoner's dilemma when they
A. compete aggressively and earn low profits. B. compete aggressively and earn high profits. C. cooperate to minimize prices. D. cooperate to maximize profits.
When the supply of labor to a firm is perfectly elastic the marginal factor cost will equal the
A) market price of the product. B) wage rate. C) marginal physical product. D) wage rate times the number of workers.
For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?
a. The opportunity cost of producing watches is higher in Denmark. b. The opportunity cost of producing cheese is higher in Denmark. c. The opportunity cost of producing cheese is identical in both countries. d. It is impossible to compare opportunity costs because the two countries use different currencies. e. In both countries combined, the opportunity cost of one watch is 150 pounds of cheese.
A sizable appreciation of the U.S. dollar in the mid-1980s
a. raised U.S. exports and imports. b. raised U.S. exports and reduced imports. c. reduced U.S. exports and imports. d. reduced U.S. exports and raised imports.