Assume that India has a comparative advantage in producing a computer game. The United States has an absolute advantage in producing the same game. Mutually advantageous trade will have India producing and exporting the game while the United States will specialize in producing something else
a. True
b. False
A
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When a market is efficient, the
A) sum of consumer surplus and producer surplus is maximized. B) deadweight gain is maximized. C) quantity produced is maximized. D) marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. E) total benefit equals the total cost.
Goods and services provided by state and local governments are:
A. included in GDP at cost. B. excluded from GDP because they are not sold in markets. C. included in GDP at market prices. D. excluded from GDP because they are publicly provided.
Exhibit 2-2 Production possibilities curve
In Exhibit 2-2, the opportunity cost of coffee when moving from A to B is:
A. the same as moving from A to C. B. the same as moving from A to D. C. the same as moving from B to D. D. the same as moving from B to C.
A monopoly producing a chip at a marginal cost of $6 per unit faces a demand elasticity of ?2.5. Which price should it charge to optimize its profits?
A. $10 per unit B. $6 per unit C. $8 per unit D. $12 per unit