Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ________ in Alpha compared to Beta, holding other factors constant.
A. less
B. more
C. by the same amount
D. not at all
Answer: A
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Refer to Table 2-2. Assume Nadia's Neckties only produces ascots and bowties. Nadia faces ________ opportunity costs in the production of ascots and bowties
A) negative B) decreasing C) increasing D) constant
We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because
A) perfectly inelastic demand curves are rare. B) an inelastic demand curve may be perfectly inelastic at some times but not others. C) an inelastic demand curve may be elastic at low prices. D) there has never been evidence of a perfectly inelastic demand curve.
The HPAE (High Performance Asian Economies) countries
A) have all consistently supported free trade policies. B) have all consistently maintained import-substitution policies. C) have all consistently maintained non-biased efficient free capital markets. D) have all maintained openness to international trade. E) have all outperformed the U.S.
Figure 7-6
Which of the lines in Figure 7-6 represents a typical average fixed cost curve?
a.
1
b.
2
c.
3
d.
4