Employing all its available resources nation Alpha can produce either 800 units of chemicals or 1,600 units of clothing. Nation Beta can produce either 200 units of chemicals or 800 units of clothing. Which of the following statements is true?
A. Alpha has a comparative advantage in producing chemicals.
B. Beta is the high-cost producer of clothing.
C. Beta has a comparative advantage in producing chemicals.
D. Alpha has a comparative advantage in producing clothing.
Answer: A
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Which of the following ensures that you'll find the goods and services that you're looking for?
A. Government and the rule of law B. Markets and banks C. Government and incentives D. Markets and incentives
Input demand functions that are calculated from profit functions differ from those calculated from cost functions because:
a. they assume cost-minimization. b. they hold output constant. c. they assume output price is constant. d. they assume output is set at its profit-maximizing level.
When the manager of a local movie theater raises the price of movie tickets from $7.50 to $8.50, his total revenue falls. This means that:
a. the demand for movie tickets is highly elastic. b. the supply of movie tickets is perfectly elastic. c. the supply of movie tickets is unit-elastic. d. the demand for movie tickets is inelastic. e. the supply of movie tickets is inelastic.
Refer to Table 7.1, which shows the relationship between the price that Gladys charges for a product and the quantity of that product that Gladys sells. Gladys' marginal revenue becomes negative starting with the production of which unit?
A. 2 B. 4 C. 6 D. None of these; marginal revenue is always positive or zero.