In the figure below, AB is the production-possibility curve of Canada. I1 and I2 are two of the community indifference curves of Canada. With free trade, the international price ratio is 0.25 bushel of wheat/bale of cotton, and Canada will import:
A. eighty bushels of wheat.
B. twenty bushels of wheat.
C. forty bales of cotton.
D. sixty bales of cotton.
Answer: D
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The difference between government receipts and government expenditures is called a _____
a. loss b. shortfall c. deficit d. debt
A firm's labor demand curve shows the relationship between the
a. wage rate and the quantity of labor supplied b. marginal revenue product of labor and the marginal product of labor c. wage rate and the quantity of labor demanded d. marginal product of labor and the quantity of labor demanded e. wage rate and the quantity demanded of the good produced by labor
For a perfectly competitive firm,
a. marginal revenue equals total revenue b. total revenue always exceeds total cost c. price always exceeds average total cost d. marginal cost always equals average cost e. the marginal revenue curve and the demand curve lie on top of each other
If Walter has one hour of leisure time in which to watch a sporting event on television, his preferences are as follows: Walter prefers watching football to watching baseball, but he prefers watching baseball to watching basketball. He is indifferent between watching baseball and watching hockey. Bundle A contains one hour of football and zero hours of all other sports. Bundle B contains one hour
of baseball and zero hours of all other sports. Bundle C contains one hour of basketball and zero hours of all other sports. Bundle D contains one hour of hockey and zero hours of all other sports. If we were to graph Walter's preferences using indifference curves, which of the following bundles would be on the same indifference curve? a. A, B, and C only b. B and D only c. A and D only d. There is no combination of the sports that could be drawn on the same indifference curve.