Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases.
B. initially increases, then decreases.
C. decreases.
D. remains constant.
Answer: A
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Which of the following is NOT a reason that free trade stimulates economic growth?
A) Free trade encourages a more rapid spread of technology. B) Industries have larger markets. C) The importation of technically advanced products enables the country to imitate the technology. D) Free trade keeps domestic prices up, enabling firms to make more profits that can be spent on research and development.
Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were:
A. zero and its economic loss was $200,000. B. $200,000 and its economic profits were zero. C. $100,000 and its economic profits were zero. D. $100,000 and its economic profits were $100,000.
In a pure capitalist economy, "what to produce" is determined by
A. government central planning committees. B. the price mechanism. C. the credo: "Each according to his ability, to each according to his needs". D. all of the choices are true.
The economic surplus of an action is:
A. the difference between the explicit and implicit costs of taking an action. B. the money a person has left over after taking an action. C. the difference between the benefit and the cost of taking an action. D. the benefit gained by taking an action.