The concept that increases in spending cause larger increases in equilibrium GDP is known as the

Answer the following statements true (T) or false (F)

1) The law of increasing opportunity costs limits international specialization. 2) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. Refer to the given information. Alpha should specialize in Y and Beta in X. 3) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. Refer to the given information. The terms of trade will be at or within the 1X = 1½Y to 1X = 2 / 3 Y range. 4) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. Refer to the given information. Alpha would prefer terms of trade at, or close to, 1X = 1½Y.

Which of the following best defines a network externality?

a. the study of strategic interactions among economic agents b. the costs involved in changing from one product to another brand or in changing suppliers c. a strategy that will be optimal regardless of opponents’ actions d. when the number of other people purchasing the good influences quantity demanded