Tax CH 7

The figure to the right shows various points on three different production possibilities frontiers for a nation.Consider the following​ events: a. from point V to point W b. from point W to point Y c. from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic​ production?

C only

Choco Fantasy is a firm that produces both dark chocolates as well as liquor chocolates. It can produce 10,000 bars of dark chocolate per month if all its resources are used to produce only this variety. Similarly, using all its resources in the production of liquor chocolates, the firm can produce 8,000 bars per month. However, during a given month, the firm produces both varieties. Which of the following, if true, would suggest that the firm is operating on its PPF?

Even though the demand for both liquor and dark chocolates has increased, the company can increase the production of only one variety.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when...

Marginal benefit equals marginal cost.

Japan has a market economy. As such, Japan's economy (relative to centrally planned economies) tends to result in...

Productive efficiency and allocative efficiency but not necessarily equity.

The principle of increasing marginal opportunity cost states that the more resources devoted to any activity, the <blank> the payoff to devoting additional resources to that activity.

Smaller

What is comparative advantage?

The ability to produce a good or service at a lower opportunity cost than other producers.

What is absolute advantage?

The ability to produce more of a good or service than competitors using the same amount of resources.

Choco Fantasy is a firm that produces both dark chocolates as well as liquor chocolates. It can produce 10,000 bars of dark chocolate per month if all its resources are used to produce only this variety. Similarly, using all its resources in the production of liquor chocolates, the firm can produce 8,000 bars per month. However, during a given month, the firm produces both varieties. Which of the following, if true, would suggest that the firm is operating at a point inside its PPF?

The firm believes in maintaining a certain amount of excess capacity to meet unexpected changes in demand.

Is it possible for a country to have a comparative advantage in producing a good without also having an absolute advantage? A country without an absolute advantage in producing a good...

Will have a comparative advantage if it has a lower opportunity cost of producing that good.

Every society faces trade-offs because we live in a world of scarcity. Suppose a student-athlete has the opportunity to earn $800000 next year playing for a minor league baseball team, $700000 next year playing for a European professional football team, or $0 returning to college for another year. The opportunity cost of the student-athlete returning to college next year is:

$800,000

The figure to the right shows various points on three different production possibilities frontiers for a nation.Consider the following​ events: a. an increase in the unemployment rate b. general technological advancement c. a decrease in consumer wealth Which of the events listed above could cause a movement from X to V​?

A only