Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining each country's production possibilities curve, it is clear that:
A. neither country will benefit from trade.
B. both countries can benefit from trade because absolute advantage exists.
C. both countries could benefit from trade because comparative advantage exists.
D. only Country A will benefit from trade.
C. both countries could benefit from trade because comparative advantage exists.
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Which of the following variables can be used to measure labor productivity?
A) real GDP B) number of labor hours C) number of workers D) all of the above
Which of the following information about fiat money is false?
A) It must be issued by a sanctioned monetary authority. B) It serves as a medium of exchange. C) It has virtually no intrinsic value. D) All of the above statements about fiat money are true.
Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler
The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals operates as a single-price monopoly, then there will be a deadweight loss equal to A) $24 million. B) zero. C) $16 million. D) $32 million.
According to the new classical economics, changes in monetary policy will only impact GDP if:
a. they impact the price level. b. they are unpredictable. c. people have perfect information about these shocks. d. None of the above.