_____ is the practice of using extra resources to compete for obtaining monopoly, and leads to _____
a. X-inefficiency; a deadweight loss
b. Rent seeking; a deadweight loss
c. X-inefficiency; a loss in producer surplus
d. Rent seeking; a loss in producer surplus
B
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Figure 4-23
In Figure 4-23, which of the following movements would be caused by a change in income?
A. A to C B. C to A C. B to D D. B to A
A breakthrough in technology is most likely to: a. reduce the labor needed to produce a given amount of output. b. decrease the demand for all goods and services in a country. c. increase the cost of production for a firm
d. reduce the availability of skilled workers. e. lower the standard of living in a country in the long run.
Saudi Arabia produces oil more cheaply than Iran but the opportunity cost of producing oil in Saudi Arabia is higher than in Iran. Saudi Arabia produces figs more cheaply than Iran but the opportunity cost of producing figs in Saudi Arabia is lower than in Iran. Should they trade? Who should produce what? a. No, Saudi Arabia is more efficient in both oil and figs and will lose by trading. b
Yes, because Saudi Arabia has an absolute advantage in figs, it should produce figs and Iran should produce oil. c. Yes, because Saudi Arabia has a comparative advantage in oil, it should produce oil and Iran produce figs. d. Yes, because Iran has a comparative advantage in oil, it should produce oil and Saudi Arabia produce figs. e. No, because the terms of trade would be negative for Iran.
In the circular flow diagram model:
A. households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. B. businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. C. households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. D. Both (a) and (b) are correct.