If the price of product L increases, the demand curve for close-substitute product J will:
A. shift downward toward the horizontal axis.
B. shift to the left.
C. shift to the right.
D. remain unchanged.
Answer: C
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If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing milk shakes
Indicate whether the statement is true or false
The main reason why the traditional classical school ceased to be widely accepted was that: a. it did not reflect the realities of the modern economy. b. when Keynes received the Nobel Prize, the academic establishment started believinghis ideas
c. it could not explain the persistence of the high levels of unemployment seen during the Great Depression. d. it was too abstract to be completely understood. e. it could not explain the relationship between inflation and unemployment.
One explanation for why oligopolies exist is that
a. it is easier to regulate a smaller number of firms b. minimum efficient scale is small relative to the market, allowing a large number of firms to achieve minimum long-run average total cost c. minimum efficient scale is large relative to the market, allowing only a few firms to achieve minimum long-run average total cost d. minimum efficient scale may be greater than the market quantity demanded at the price equal to minimum long-run average total cost e. competitive pricing drives firms from the market
An opportunity cost is:
a. the value obtained when making a choice. b. the price paid for the choice that is made. c. what must be given up to obtain something that is desired. d. what must be given up to obtain something that is not desired.