Using Figure 1.3 and starting from PP1, an increase in the capacity to produce can be represented by a movement from
A. Point A to point C.
B. Point B to point C.
C. Point A to point B.
D. Point C to point F.
Answer: D
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If a comparative advantage implies that a country can produce a product at a lower opportunity cost than another country then why do we see two countries often trading the same goods? For instance, for most agricultural products the U.S
has a comparative advantage. Japan, one of America's largest trading partners has a comparative advantage in the production of most economy cars. Explain what is going on here when we still see the U.S. exporting cars to Japan and the U.S. importing some foods from Japan.
Horizontal equity is achieved when taxes are collected from those who benefit from the government expenditure of the tax revenue
Indicate whether the statement is true or false
Suppose a firm's total revenue is $100 when it sells 10 units, and $110 when it sells 11 units. The firm, therefore, is a(n):
A. oligopolist. B. monopolistic competitor. C. pure monopolist. D. perfect competitor.
Along the same indifference curve, MRS is ________ as more of one good is obtained.
A. decreasing B. constant C. increasing D. varying irregularly