Because of the existence of comparative advantage, the total output of goods is higher when each producer
A) produces many different goods.
B) produces at the midpoint of its PPF.
C) specializes in the production of one good or a few goods.
D) makes both intermediate and final goods.
C
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The above figure shows the demand and supply curves in the market for milk. Currently, the market is in equilibrium
If the government imposes a $2 per gallon tax to be collected from sellers, calculate the dead weight loss associated with the tax, and explain why the dead weight loss occurs.
The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2?
A. a decrease in the price of wheat B. a subsidy for wheat production C. an increase in the price of wheat D. a tax on wheat production
Figure 6.3 shows the cost structure of a firm in a perfectly competitive market. If the market price is $3 and the firm shuts down in the short run, its profit is:
A. -$300. B. -$600. C. -$900. D. -$1,200.
Mutual interdependence would tend to limit control over price in which market model?
A. Monopolistic competition B. Pure competition C. Pure monopoly D. Oligopoly