If there is always a 4-for-1 tradeoff between producing good X and good Y, it follows that the opportunity cost of X (in terms of Y) ____________________ and the PPF for these two goods is ______________________
A) decreases at low levels of X; a straight line
B) rises at high levels of Y; bowed-outward
C) decreases at high levels of X; bowed-outward
D) is always the same; a straight line
D
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If there are big gains to be had from specialization and trade, countries generally don’t produce one good because:
A. national economies often are perfectly free markets. B. there is perfectly free trade between national economies. C. specialization is generally limited by trade agreements. D. All of these are true.
A price floor set above the equilibrium price will
A) clear the market for the good. B) result in a shortage of the good. C) result in a surplus of the good. D) force some firms in this industry to go out of business.
A tax on accounting profits in an industry
A. will lead to more inefficiency if economic profits are high. B. will lead to more inefficiency if economic profits are low C. will increase the MRP curve of nonfixed factors. D. will increase the MRP curve of fixed factors.
What significance does growing economic interdependence have for a country like the United States?
A. Exports and imports decrease as a share of national output. B. The U.S. agricultural sector increasingly benefits from free trade. C. International political and economic events have an increasingly important effect on energy prices in the United States. D. Foreign competition increasingly affects profits of domestic firms.