Countries import goods in which they have:
a. an absolute advantage.
b. a comparative advantage.
c. a reputation for good product quality.
d. a comparative disadvantage.
e. a surplus domestic production.
d
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Long-run competitive equilibrium in an industry implies that no firm:
A. is producing at the output level where price equals long-run average total cost. B. is earning accounting profits. C. is earning a normal profit. D. has an incentive to enter or exit the industry.
Refer to the accompanying figure.
An economy is currently in long-run equilibrium at point B, at an inflation rate of ?', which is too high for to sustain economic growth. If an anti-inflationary policy is enacted, the economy will be in short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________.
A. A; B B. B; C C. A; C D. B; A
Economic models do not reflect the full complexity of reality, but instead are based on:
A. Simplifications B. Tradeoffs C. Value judgments D. Predictions
Refer to the table below. If the consumer buys product X or product Y one unit at a time, which of the following will the consumer's first two purchases be?
Answer the question based on the table below showing the marginal utility schedules for product X and product Y for a hypothetical consumer. The price of product X is $4 and the price of product Y is $2. The income of the consumer is $20.
A. A first unit of X followed by a first unit of Y
B. A first unit of X followed by a second unit of X
C. A first unit of Y followed by a first unit of X
D. A first unit of Y followed by a second unit of Y