Trading partners should specialize in producing goods in accordance with comparative advantage, then trade and diversify in consumption because
a. out-of-pocket costs of production decline
b. free trade areas protect infant industries
c. economies of scale are present
d. manufacturers face diminishing returns
e. more goods are available for consumption
e
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The marginal rate of technical substitution of labor for capital (MRTSLK) measures
a. the amount of capital that can replace a unit of labor without affecting the firm's output. b. the additional output attributable to a 1% increase in labor and capital usage. c. the rate at which the firm can exchange labor for capital in the input markets. d. the slope of the firm's expansion path.
If the price of its product just equals the average variable cost of production for a competitive firm,
A) total revenue equals total fixed cost and the firm's loss equals total variable cost. B) total revenue equals total variable cost and the firm's loss equals total fixed cost. C) total fixed cost is zero. D) total variable cost equals total fixed cost.
For years, your parents claimed they had no desire to join a social web site. Recently, however, they joined one and said they did so because all their relatives have joined the same site with them. Your parents' behavior is an example of
A) a switching cost. B) a network effect. C) the impact of positive market feedback. D) the impact of negative market feedback.
Which fundamental economic question is most closely related to the issues of income distribution and poverty?
a. The What to Produce question. b. The Why to Produce question. c. The How to Produce question. d. The For Whom to Produce question.