The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Karl.
Who has the highest opportunity cost of producing rice?
A. Drew
B. Kari
C. Janna
D. Janna and Drew
Answer: C
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The incidence of a tax depends on whether the government collects the tax from buyers or sellers
Indicate whether the statement is true or false
A rise in interest rates leads to:
a. an increase in the PDV of profits from owning a machine. b. a decrease in the PDV of profits from owning a machine. c. offsetting the effects on the costs and benefits of owning a machine. d. no effect on either the costs or benefits of owning a machine.
Which would be considered an investment, according to economists?
A. The sale of a retail department store building by Sears to JCPenney. B. The purchase of newly issued shares of stock in Dell. C. The construction of a new plant by Ford. D. Public transfer payments.
Coase bargaining works best in a situation with a large number of affected parties and the transactions costs of bargaining are relatively low.
Answer the following statement true (T) or false (F)