What does the specificfactors model allow us to analyze?
a. the returns to factors of production
b. the allocation of resources between sectors
c. the returns to factors of production and the allocation of resources between sectors
d. the allocation of resources to the service sector
Ans: c. the returns to factors of production and the allocation of resources between sectors
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Economics promotes which of the following as the way to make the best decision?
A) Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost. B) Continue an enjoyable activity until it is no longer enjoyable. C) Continue an enjoyable activity until you cannot afford to pursue it. D) Continue an enjoyable activity as long as you do not have to pay for it.
If the euro continues to remain strong against the U.S. dollar, which of the following strategies would make the most sense for BMW?
A) It might be advantageous for BMW to consider exporting from Germany to the United States to take advantage of cheaper costs. B) It might increase its manufacturing capacity in the United States to take advantage of the cheaper dollar. C) It might consider raising prices in the United States to earn more profits for BMW. D) It really doesn't make any difference to BMW since consumers will buy the cars no matter what they cost.