When nations trade according to their comparative advantages,
a. one nation has an absolute advantage in producing all goods
b. all opportunity costs of production are the same
c. world economic efficiency falls
d. at least one country is made better off through trade
e. at least one country is made worse off through trade
D
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Gross domestic product understates the total production of final goods and services because of the omission of
A) intermediate goods. B) exports. C) inflation. D) the underground economy.
Which of the following encourages people to engage in activities that yield uncertain returns?
a. perfect information b. economic profit c. accounting profit d. all of the above
If consumers view cappuccinos and lattes as substitutes, what would happen to the equilibrium price and quantity of lattes if the price of cappuccinos rises?
A) Both the equilibrium price and quantity would increase. B) Both the equilibrium price and quantity would decrease. C) The equilibrium price would increase, and the equilibrium quantity would decrease. D) The equilibrium price would decrease, and the equilibrium quantity would increase.
Diseconomies of scale are reflected in
A. The upward-sloping segment of the long-run average total cost curve. B. A downward shift of the long-run average total cost curve. C. The downward-sloping segment of the long-run average total cost curve. D. The downward-sloping segment of the long-run marginal cost curve.