Britain imports some goods and exports other goods primarily because of:
A) free goods.
B) specialization.
C) unemployment.
D) self-sufficiency.
Ans: B) specialization.
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If consumers completely cease purchasing a product when its price increases by any amount, then demand is:
A. unit elastic. B. perfectly inelastic. C. perfectly elastic. D. inelastic.
It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal cost curve. In order for this to be true, which of the following additional assumptions are necessary? I. That the firm seek to maximize profits. II. That the marginal cost curve be positively sloped. III. That price exceeds average variable cost. IV. That price exceeds average total cost
a. All of the above. b. I and II but not III and IV. c. I and III but not II and IV. d. I and II only. e. I, II and III, but not IV.
If an economy keeps increasing its capital stock, then over time its production possibilities curve will
a. remain unchanged but more capital goods will be produced b. shift outward c. shift inward d. disappear because scarcity will eventually be overcome e. remain unchanged, but production will occur outside (exterior to) the curve
The linkage between high productivity and high earnings is vitally important because
a. it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. b. high productivity (a large output per hour worked) is the key to high living standards. c. it brings the self-interest of individuals into harmony with economic progress. d. all of the above are true.