The United States is a leading exporter of wheat. What explains the source of the comparative advantage of the United States in wheat production?
A) positive externalities
B) investment by multinational firms such as Archer-Daniels-Midland and Tyson Foods Inc.
C) climate and soil conditions in the United States which are well-suited for wheat production
D) a large supply of unskilled labor
Answer: C
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When the benefit of another hour of work is greater than the opportunity cost, we would expect the worker to work:
A. another hour. B. an hour less. C. exactly that amount. D. Cannot be determined without more information.
The courts in some states have declared the financing of public schools by local property taxes unconstitutional because
A. housing should never be the basis for taxation of any kind. B. taxes on real estate generate too much tax revenue. C. disparity in property values means some communities have more in tax revenues to spend on education than do communities containing less valuable property. D. the funds for public education should come from federal revenues, not from local property taxes.
Bill has $10 to spend on a Superman, Batman, or an X-Men T-shirt. Bill buys the Superman T-shirt and the Batman shirt was a close second choice. What is the opportunity cost?
A. The amount he spent, $10. B. Nothing, since he got his preferred choice. C. The Batman T-shirt. D. The X-Men T-shirt.
The Phillips curve trade-off relationship implies that
A. the government can fine-tune the economy and pick the most preferred combination of unemployment and inflation. B. there is no relationship between inflation and unemployment, at least in the long run. C. low unemployment can be obtained only by generating rapidly increasing inflation. D. the government can fine-tune the economy and generate both the natural rate of unemployment and zero inflation.