Suppose that a worker in Caninia can produce either 2 blankets or 8 meals per day, and a worker in Felinia can produce either 5 blankets or 1 meal per day. Each nation has 10 workers. For many years, the two countries traded, each completely specializing according to their respective comparative advantages. Now war has broken out between them and all trade has stopped. Without trade, Caninia
produces and consumes 10 blankets and 40 meals per day and Felinia produces and consumes 25 blankets and 5 meals per day. The war has caused the combined daily output of the two countries to decline by
a. 15 blankets and 35 meals.
b. 25 blankets and 40 meals.
c. 35 blankets and 45 meals.
d. 50 blankets and 80 meals.
a
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Total variable cost
A) increases as output increases. B) does not change as output changes. C) decreases as output increases. D) initially decreases and then increases as output increases.
The marginal productivity theory of income states that a person's total income is determined by
A) how much the individual works. B) how profitable the firm the individual works for is. C) how much the individual has inherited. D) the amount and productivity of factors of production the individual owns.
The demand curve faced by a perfectly competitive firm
a. is the market demand curve b. slopes downward c. is perfectly elastic d. is vertical e. rises when market supply rises
A reform introduced under Deng:
a. the Shanghai experiment b. the Great Leap c. the Cultural Revolution d. the Tang Reform e. free trade zones