Specialization and international trade will
A. make a nation consume a combination on its production possibilities frontier.
B. allow a nation to consume beyond its production possibilities frontier.
C. move a nation to a point inside its production possibilities frontier.
D. result in a rightward shift of a nation's production possibilities frontier.
Answer: B
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A customs duty is
a. a tax in the form of a percentage of the value of the good taxed b. a fixed tax in the form of cents or dollars per unit of the good c. a sales tax applied to a foreign good d. any tax levied on a good e. the same as a poll tax
If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?
a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.
Refer to the above graph. Which of the lines in the above diagram represent(s) a progressive tax?
A. Both A and B B. B only C. C only D. D only
If, in the short run, the level of output is zero, which of the following statement is TRUE?
A) Total variable cost is zero but total cost equals total fixed cost, and both of the latter exceed zero. B) Total cost and total fixed cost graphs will begin at the origin. C) Total fixed cost will also be zero at first but will rise once output rises. D) none of the above