Refer to Figure 1.7. The cost of producing at point D rather than point J is
A. KM units of clothing.
B. AC units of food.
C. OA units of food.
D. OM units of clothing.
Answer: A
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The Latin phrase ceteris paribus means that when a relationship between two variables is being studied
A) neither of those two variables is allowed to change. B) both are treated as unpredictable. C) we recognize that some factors are unknown. D) all other variables are held fixed.
Using the figure above, suppose with no trade Liz and Joe each produce at point A on their respective PPFs. Then, Joe suggests that they specialize and trade. He would produce only salads and Liz would produce only smoothies
Then, Joe says, he would buy 16 smoothies from Liz at a price of 1.5 salads per smoothie. Liz should A) not accept Joe's offer since she would lose 2 smoothies and 2 salads. B) accept Joe's offer, as she will be as well off as with no trade. C) accept Joe's offer since she will gain 4 smoothies and 4 salads. D) accept Joe's offer since she will gain 4 salads. E) not accept Joe's offer, as the price he offers is too low for her to gain from trade.
A detailed history of business cycles is known as a
A) historical decomposition. B) trend analysis. C) Hodrick—Prescott filter. D) business cycle chronology.
Multiple levels of government are desirable because _____
a. different governmental activities are best undertaken by governments of different sizes b. many governmental activities can only be financed if taxed at multiple levels of government c. multiple levels of government provide sufficient bureaucracy to deal with the complex problems faced by today's governments d. government could not be financed adequately without local governments doing the majority of the work ensuring compliance with the tax system