Specialization according to comparative advantage, followed by trade, allows everyone to acquire more of the goods they want
a. True
b. False
Indicate whether the statement is true or false
True
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The demand curve for labor of a monopolist
A) is horizontal even though the demand curve for labor for a competitive firm is downward sloping. B) slopes down for the same reason as the demand curve for labor of a perfectly competitive firm. C) slopes down because of the law of diminishing marginal product and because the monopolist must lower prices to sell additional units of the good. D) slopes upward because monopolists use more capital than do perfectly competitive firms.
If a firm enlarges its factory size and realizes higher average (per unit) costs of production then:
a. it has experienced economies of scale. b. it has experienced diseconomies of scale. c. it has experienced constant returns to scale. d. the long-run average cost curve slopes downward. e. the long-run average cost curve shifts upward.
A 10 percent increase in the price of butter reduces butter consumption by about 5 percent. The increase causes households to
a. spend more on butter. b. spend less on butter. c. spend the same amount on butter. d. consume more goods like bread that are complements of butter.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.