In Figure 35.1, what is the opportunity cost of motorcycles in the United States?
A. 2 DVD players per motorcycle.
B. 1/2 of a DVD player per motorcycle.
C. 1/3 of a DVD player per motorcycle.
D. 1 DVD player per motorcycle.
Answer: D
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What are variables that reflect peaks and troughs in economic activity as they occur?
a. Coincident economic indicators b. Lagging economic indicators c. Leading economic indicators d. Productivity indicators
Which phase of the business cycle would be most closely associated with an economic contraction?
A. recession B. peak C. trough D. recovery
The principle of comparative advantage
A. applies only when the gold standard is in effect. B. is the basic reason that the United States has been running trade deficits. C. states that it is advantageous to export more than you import. D. states that total output is greatest when each product is made by the country that has the lowest opportunity cost.
If a firm buys some labor in a competitive market and some labor as a monopsonist, the firm is most likely to
A) pay the same wage to both types of labor. B) pay a lower wage to the labor purchased in the competitive market. C) pay a higher wage to the labor purchased in the competitive market. D) not exercise any of its monopsony power.