You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC: 
Both islands specialize exclusively in the product for which they have a comparative advantage. You have agreed to give 350 coconuts to the other island in exchange for 1,300 fish. After the trade the other island has a total of ________ coconuts and ________ fish.
A. 350; 1,200
B. 500; 1,200
C. 350; 1,500
D. 850; 1,200
Answer: A
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If the economy moves upward along its short-run Phillips curve, in the AS-AD diagram, this movement is shown by a
A) rightward shift of the AS curve and a movement along the AD curve. B) movement downward along the AS curve as a result of a leftward shift of the AD curve. C) movement upward along the AS curve as a result of a rightward shift of the AD curve. D) leftward shift of the AS curve and a movement along the AD curve. E) rightward shift of potential GDP.
The famous saying, "There is no such thing as a free lunch" means
A) we do not live in a free country. B) the value of our dollar keeps declining. C) people face tradeoffs. D) people do not care about others enough.
The federal gasoline tax is an example of:
A. a specific tax. B. an ad valorem tax. C. a lump sum tax. D. an income tax.
The Agriculture Adjustment Act of the Roosevelt Administration attempted to boost prices of agriculture products by
a. increasing the money supply from year to year at a constant rate. b. decreasing the money supply through a policy of monetary contraction. c. increasing demand through lower taxes and budget deficits. d. reducing supply through the planned destruction of agricultural crops and livestock.