Poor economies may have difficulty growing because
a. their production possibilities curves slope upward instead of downward
b. they cannot cut back on their production of consumption goods to increase their production of capital goods
c. they have a solid consumption base already in place
d. their resource bases are fully developed
e. the law of increasing costs makes it hard to produce more goods
B
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Which of the following statements is true of the process of colonization?
A) Institutions in North America were set up by Europeans. B) Europeans set up similar institutions around the world. C) Residents in all colonies had similar property rights. D) It was characterized by the absence of slavery.
Based on our understanding of the paradox of saving, we know that a reduction in the desire to save will cause
A) an increase in equilibrium GDP. B) a reduction in GDP. C) an increase in the desire to invest. D) no change in equilibrium GDP. E) a permanent reduction in the level of saving.
The contention that tariffs should be imposed to protect from import competition an industry that is trying to get started is
A) a basic argument for free trade. B) the infant industry argument. C) dumping. D) a voluntary restraint agreement.
In a natural monopoly situation
A. there is no need for government regulation. B. producers try to differentiate their product with advertising. C. there are large economies of scale relative to demand. D. the firm has an upward sloping average cost curve.