For allocative efficiency to hold
A) average total cost is minimized in production.
B) average variable cost is minimized in production.
C) price must equal the marginal cost of the last unit produced.
D) price must equal marginal revenue of the last unit sold.
C
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A "twinkie tax" on fatty foods would aim to
A) reduce the consumption of fatty foods. B) reduce the production of fatty foods. C) raise tax revenues for other uses. D) All of the above.
The equilibrium output level in the country of Plutonia is $40 billion, while its potential output is $60 billion. Suppose the central bank of the country implements an expansionary monetary policy. This is likely to lead to _____
a. an expansionary gap b. a liquidity trap c. disinflation d. inflation
Many call centers that provide telephone customer services for U.S. companies have been established in India, but few or none have been established in China. Why?
A. China lacks the political infrastructure to support call centers. B. China is at a more advanced stage of economic development than India. C. Indian labor costs are lower than Chinese labor costs. D. Chinese labor lacks the specific language skills needed to make call centers profitable in China.
Goodwill can be a source of comparative advantage.
Answer the following statement true (T) or false (F)