The increase in welfare in both countries that results from specialization and trade is called:
A. deadweight gain.
B. exportation surplus.
C. gains from trade.
D. surplus enhancement.
Answer: C
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The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF0 . At which of the following production points would the economy grow most rapidly?
A) Point A B) Point B C) Point C D) It makes no difference among the three points because they are all production efficient. E) More information is needed to answer the question.
The figure above shows the marginal revenue and costs of a perfectly competitive firm. The marginal cost of the last unit produced is
A) $4 per unit. B) $8 per unit. C) $16 per unit. D) None of the above answers is correct.
The process of combining many different debt instruments like home mortgages into a pool of hundreds of thousands of individual contracts and then selling new financial instruments is called
A) Securitization. B) Leveraging. C) Sub-priming. D) NINJA loaning.
Starting from equilibrium and using the ISLM framework, a decrease in investment leads to
A) lower interest rates and higher income. B) higher interest rates and higher income. C) lower interest rates and lower income. D) higher interest rates and lower income.