In the figure above, which of the following is true?
i. Governments coordinate economic activities of households and firms.
ii. Governments buy goods and services in goods markets.
iii. Households pay taxes directly to firms.
A) only ii
B) only i
C) only iii
D) i and ii
E) ii and iii
A
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On a graph showing investment along the vertical axis and income along the horizontal axis, _____
a. the investment line will be downward sloping b. the investment line will be upward sloping c. the investment line will be horizontal d. the investment line will be vertical e. the investment line will be U-shaped
If the cost of producing sofas decreases, then consumer surplus in the sofa market will
a. increase. b. decrease. c. remain constant. d. increase for some buyers and decrease for other buyers.
If the production of computer chips yields greater technology spillovers than the production of potato chips, the government should
a. encourage the production of computer chips with subsidies. b. discourage the production of potato chips with taxes. c. encourage the production of potato chips with subsidies. d. discourage the production of computer chips with taxes.
Assume South Korea and Vietnam have the same amount of resources. In a given time period, South Korea can produce 100,000 jackets or 1,000,000 shirts. Vietnam can produce 200,000 jackets or 2,000,000 shirts. This means that
A. Vietnam has an absolute advantage in both jackets and shirts. B. South Korea has an absolute advantage in jackets. C. South Korea has a comparative advantage in jackets. D. Vietnam has a comparative advantage in shirts.