Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. initially increases, then decreases.
B. increases.
C. remains constant.
D. decreases.
Answer: B
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In the used car market without warranties, adverse selection results in
A) sellers of "lemons" claiming that their car is a lemon. B) only lemons being available for sale. C) the market price of used cars equal to that of good used cars. D) all of the above.
The government intervenes in the economy to protect labor by
A. Ensuring minimum wages in addition to overtime provisions. B. Ensuring workplace safety conditions. C. Enforcing child labor laws to prevent child exploitation. D. All of the choices are correct.
A firm's value added equals
A) its revenue minus all of its costs. B) its revenue minus its wages. C) its revenue minus its wages and profit. D) its revenue minus its cost of intermediate goods. E) none of the above
Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria. We can conclude that
A) Bulgaria also has an absolute advantage in producing sandals relative to Finland. B) Bulgaria has a lower opportunity cost of producing sandals relative to Finland. C) Finland has an absolute disadvantage in producing sandals relative to Bulgaria. D) Labor costs are higher for sandal producers in Finland than in Bulgaria.