Economists refer to the ability of one person or nation to do something with a lower opportunity cost than another as _____
a. voluntary trade
b. specialization
c. gains from trade
d. absolute advantage
e. comparative advantage
e
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In the above table, the average fixed cost at 4 units of output is
A) $1.00. B) $4.50. C) $4.70. D) $4.80.
The consumption of a club good like cable television: a. is nonexcludable and nonrivalrous. b. is excludable and rivalrous
c. is excludable and nonrivalrous. d. is nonexcludable and rivalrous. e. gives rise to the free rider problem.
There are very few, if any, good substitutes for motor oil. Therefore, the
a. demand for motor oil would tend to be inelastic. b. demand for motor oil would tend to be elastic. c. demand for motor oil would tend to respond strongly to changes in prices of other goods. d. supply of motor oil would tend to respond strongly to changes in people's tastes for large cars relative to their tastes for small cars.
The deadweight loss from a $3 tax will be largest in a market with
a. inelastic supply and elastic demand. b. inelastic supply and inelastic demand. c. elastic supply and elastic demand. d. elastic supply and inelastic demand.