Which of the following distinctions helps to explain the difference between relevant and irrelevant cost?
A) accounting cost vs. direct cost
B) historical cost vs. replacement cost
C) sunk cost vs. fixed cost
D) variable cost vs. incremental cost
B
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Using the specific factors model, assume that strawberry production requires the specific factor of land, tractor production requires the specific factor of capital, and labor is variable
If the United States is capital abundant compared to Mexico, and Mexico is land abundant compared to the United States, then in the short run with trade we would expect A) the income of U.S. land owners to increase. B) the income of U.S. workers to increase. C) the income of Mexican workers to increase. D) the income of Mexican land owners to increase.
An isoquant indicates different combinations of
A) two inputs that can be purchased for the same amount of money. B) two inputs that can produce the same amount of output. C) output that can be produced with the same amount of input. D) output that cost the same amount to produce.
Assume that the graph below describes the current labor market for nurses in a mid-sized city and that the labor market is perfectly competitive.
If supply shifts from S0 to S1 and demand shifts from D0 to D1, then the equilibrium wage will ________, and the equilibrium number of nurses will ________.
A. increase; increase B. stay the same; increase C. increase; stay the same D. stay the same; stay the same