Suppose we are modeling a "closed" economy. The only way its government can obtain more goods and services than it can claim with net tax revenues is for
A) exports to exceed imports.
B) imports to exceed exports.
C) investment to exceed saving.
D) saving to exceed investment.
D
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Ultimately, short-run supply curves are upward sloping because of
a. the irrelevance of fixed costs to the firm's decision making. b. the factor-price effect. c. diminishing marginal returns to the variable inputs. d. the equality of demand and marginal revenue for competitive firms.
The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The table shows that
A) Anaconda has a comparative advantage in the production of corn. B) Bear has an absolute advantage in the production of both goods. C) Anaconda achieves production efficiency only at its production point A. D) Bear achieves production efficiency only at its production point A. E) Both answers A and B are correct.
By producing at the point where MR = MC, the firm:
a. is guaranteed a profit. b. will earn a profit of zero. c. will lose money. d. profit is maximized. e. output.
The ability of a country to produce a specific good at a lower opportunity cost than its trading partners is known as
A. The human advantage. B. Absolute advantage. C. The inequality trap. D. Comparative advantage.