If consumers buy only gasoline and food, at their best affordable choice the marginal rate of substitution between food and gasoline ________ the relative price of food and gasoline
A) must exceed
B) must be less than the
C) must equal
D) might exceed or be less than but not equal to
C
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Returns to specialization can occur when
A) increasing the amount of labor allows workers to specialize. B) the exponents of the Cobb-Douglas production function are greater than 1. C) a firm doubles its inputs. D) the average cost curve is above the marginal costs curve.
The demand curve for labor will shift whenever
A) the demand for the final product changes. B) the wage rate changes. C) the supply curve of labor shifts. D) the marginal factor cost changes.
Which of the following is correct?
a. In unionized industries, wages are below the level that would prevail in competitive markets. b. The introduction of a union in an industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. c. There is a strong consensus among economists that unions are bad for the U.S. economy. d. All of the above are correct.
If a country is completely self-reliant in producing goods for its own consumption needs, then
A. It achieves a higher standard of living by exporting. B. It promotes specialization. C. It consumes more than it can with trade. D. Its consumption possibilities equal its production possibilities.