The ability to produce a good at a lower opportunity cost than others is known as
A) comparative advantage.
B) absolute advantage.
C) specialization.
D) marginal cost production.
Answer: A) Comparative advantage.
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Fixed investment is
A) when a firm adds to its inventories of goods. B) when a firm accumulates profits. C) dissavings. D) an expenditure by firms on new machines that are expected to produce income in the future.
Suppose that the producers of copper are permitted to emit harmful pollutants, free of charge, into the air. How will the price and output of copper products in a competitive market compare with their values under conditions of ideal economic efficiency?
a. The price will be too high, and the output will be too large. b. The price will be too low, and the output will be too large. c. The price will be too low, and the output will be too small. d. The price will be too high, and the output will be too small.
What happens when consumers in the economy start to spend less, perhaps because they become worried about the future?
A. Savings rises, causing increases in investment that boost GDP. B. The demand for dollars falls, causing the exchange rate to fall and exports to rise. C. Prices fall, causing consumers to start spending again. D. The incomes of other people fall, causing those people to spend less as well.
Using cost plus pricing, what is the price if ATC = $14.50 and the target rate of return is 4 percent?
A. $15.10 B. $14.5 C. $49.34 D. $22.10