Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. If both Amy and Mike produce the good in which they have comparative advantage, the total annual output of this economy will be ________.
A. 30 cars
B. 10,000 pounds of cheese and 30 cars
C. 5,000 pounds of cheese and 20 cars
D. 10,000 pounds of cheese
Answer: C
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An increase in the U.S. price level (foreign prices held constant) will cause a leftward shift in the aggregate demand curve.
Answer the following statement true (T) or false (F)
Consider a firm with the following cost information: ATC = $15, AVC = $12, and MC = $14. If we know that this firm has decided to produce Q = 20 by following the rule to maximize profits or minimize losses, then the price of the output is:
A. $12. B. $14. C. $15. D. $20.
For a firm facing a downward sloping demand curve, marginal revenue
A. falls each time prices are raised. B. is greater at higher prices than at lower prices. C. is at a minimum at the midpoint of the demand curve. D. increases each time prices are lowered.
The higher the price of a foreign currency, the more expensive that foreign country's goods and services are to individuals in the domestic economy
a. True b. False