The above figure shows two Lorenz curves. Suppose both Lorenz curves measure wealth. Then, the curves show that wealth is
A) greater along Lorenz curve A.
B) greater along Lorenz curve B.
C) distributed more equally along Lorenz curve A.
D) distributed more equally along Lorenz curve B.
C
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In the 1970s and 1980s, the United States lost its comparative advantage in consumer electronics goods to Japan. What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?
A) Japanese firms benefited from external economies. B) Japan has abundant supplies of natural resources needed to produce electronics goods. C) Japanese firms excelled in process technology. D) Japan has abundant supplies of labor.
If the marginal profit from increasing output by one unit is negative, then to attain an optimum, the firm should
A. increase output until marginal profit equals zero. B. reduce output until marginal profit equals zero. C. increase output until marginal profit is maximized. D. reduce output until marginal profit is maximized.
Paddy and Mick live in a small town. They burn coal to keep their houses warm at night. However, this burning of coal is harming the air quality of the neighborhood. Both Paddy and Mick could install air filters on their chimneys. These filters cost $50 each. Each filter provides a social benefit of $80, but those benefits are divided equally among Paddy and Mick. If both Paddy and Mick install
the filters, together they will _____. a. gain $10 b. gain $0 c. lose $20 d. gain $30
Figure 34-7
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In Figure 34-7, CF has the same slope as BG. AB and CD are the production possibilities of Pestoland and Pastaland, respectively. If both countries are given the opportunity to trade at prices indicated by CF,
A. both will refuse trade. B. both will agree to trade. C. Pestoland will wish to trade, but Pastaland will not. D. Pastaland will wish to trade, but Pestoland will not.