In an attempt to limit the supply of illegal liquor, the Russian government has restricted sugar availability (sugar is used to increase alcohol content). Russians also like to sweeten their tea with jam, another product made using sugar. Which graph in Figure 4-11 depicts the impact of sugar rationing on the Russian tea market?
A. 1
B. 2
C. 3
D. 4
Answer: C
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Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Free trade between these two countries will take place
A) as long as Canada is willing to give up 0.25 unit of clothing to get a unit of food. B) as long as USA asks for at least 1.5 units of clothing in exchange for a unit of food. C) as long as Canada asks for at least 3 units of food in exchange for a unit of clothing. D) as long as USA is willing to give up at least 1.5 units of food in exchange for a unit of clothing.
When is it not in the best interest of a company to hire additional workers in the short run?
A) when the average product of labor is decreasing B) when the firm is in Stage II of the production process C) when the marginal revenue product equals zero D) when the wage rate is equal to or greater than labor's marginal revenue product
The idea that it takes 90 percent of your time to clean up the last 10 percent of your house illustrates that
A) the marginal cost of cleaning up slopes downward. B) the marginal cost of cleaning up slopes upward. C) the marginal benefit of cleaning up is constant. D) the marginal benefit of cleaning up slopes upward.
Why should consumers be concerned about collusive agreements? What legal remedies are available now?