Which of the following is true?
a. International trade makes it possible for a country's consumption possibilities to exceed its production possibilities.
b. International trade requires that a country's production possibilities exceed its consumption possibilities.
c. A country's production possibilities always equal its consumption possibilities.
d. A country's consumption possibilities can never equal its production possibilities because of leakages in the system.
e. As long as there is full employment of resources, a country's production possibilities will exceed its consumption possibilities even with trade.
A
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The value of marginal product (VMP) of labor is the extra revenue generated by
A) selling one additional unit of output. B) raising the price of the good by one dollar. C) hiring one additional unit of labor. D) price discrimination.
The distribution process performed by the price system is not as efficient as the distribution process of central planners
a. True b. False Indicate whether the statement is true or false
Which of the following is true of exchange?
a. Exchange is a zero sum activity; if one party to an exchange gains, the other must lose an equal amount. b. The exchange value of a good is determined by the cost of the resources required to produce the good. c. The total output trading partners are able to produce is not influenced by whether the partners trade with each other. d. Exchange permits trading partners to expand their total output of goods and services as the result of greater specialization in areas where each has a comparative advantage.
The term "deadweight loss" or "excess burden" is used to describe the
a. expenditures on exercise and weight-reducing programs by individuals who are overweight. b. loss from the elimination of mutually beneficial exchanges that results from the imposition of a tax in a market. c. difference between the value consumers place on a good and the price they have to pay for it. d. reduction in consumer welfare that occurs when the firms in a market make a profit.