In the figure above, as more six-packs of soda are consumed, moving along any of the illustrated indifference curves, the MRS between twelve-packs of soda and six-packs of soda
A) increases.
B) decreases.
C) stays constant.
D) first increases, then decreases.
C
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The balanced budget multiplier
a. increases as MPC increases b. increases as MPC decreases c. depends on the absolute level of government spending d. is always greater than the income multiplier e. is always equal to 1
Define comparative advantage
When dealing with externalities, how can we correct market failure?
a) In the case of negative externalities, the market can correct it, but in the case of positive externalities, government regulation is necessary. b) In the case of positive externalities, the market can correct it, but in the case of negative externalities, government regulation is necessary. c) In the case of both positive and negative externalities, market can correct all market failures. d) In the case of both positive and negative externalities, government regulation is necessary to induce market participants to internalize the externality.
A country will specialize in the good for which
A. it has moderate production costs. B. it has absolute advantage. C. it can produce at minimum average cost. D. it has comparative advantage.