Suppose there are only 2 nations, Atlantis and Pacifica, and only two goods, surfboards and kayaks. If Atlantis produces only surfboards, it can make 50 per day. If Atlantis produces only kayaks, it can make 75 per day. If Pacifica produces only surfboards, it can make 75 per day. If Pacifica produces only kayaks, it can make 75 per day. After trade begins, ________ will specialize in the production of surfboards and ________ will specialize in the production of kayaks.
A. Atlantis; Atlantis
B. Pacifica; Pacifica
C. Atlantis; Pacifica
D. Pacifica; Atlantis
Answer: D
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Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appear
A) along Tomaso's production possibilities frontier. B) inside Tomaso's production possibilities frontier. C) outside Tomaso's production possibilities frontier. D) at the horizontal intercept of Tomaso's production possibilities frontier.
When workers are paid a wage that is less than their contribution to a monopsonist's revenues
A. they seek part time employment. B. they file a grievance with their union representative. C. this is sometimes referred to monopsonistic exploitation. D. this is sometimes referred to as an incentive.
When the increase in the price of one good causes the demand for another good to decrease, the goods are
A. normal. B. complements. C. substitutes. D. inferior.
The law of diminishing marginal utility does not apply to interpersonal comparisons of utility
Indicate whether the statement is true or false