If a linear, two-good production possibilities curve has a slope of ?2, then:
A. you have a comparative advantage in the good measured on the vertical axis.
B. having an additional unit of the good measured on the vertical axis means giving up ½ of a unit of the good measured on the horizontal axis.
C. you have an absolute advantage in the good measured on the vertical axis.
D. having an additional unit of the good measured on the vertical axis means giving up 2 units of the good measured on the horizontal axis.
Answer: B
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Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?
a. The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living. b. The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own. c. Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient. d. There will be no shortages under the first-come first-serve basis of allocation. e. A random process of allocation is fair in the sense that everyone gains and there are no losers.
If the wages and productivity of U.S. workers are higher than those of Mexican workers, a Japanese company would:
A. build a plant in Mexico. B. be indifferent about where the plant is built. C. build a plant in the United States. D. require more information before deciding where the plant is built.
As a result of a kinked demand curve, the price:
A. fluctuates. B. falls below the kink. C. settles at the kink. D. rises above the kink.
Output growth is another name for labor productivity growth.
Answer the following statement true (T) or false (F)