The lowest point on a purely competitive firm's short-run supply curve corresponds to:
A. the minimum point on its ATC curve.
B. the minimum point on its AVC curve.
C. the minimum point on its AFC curve.
D. the minimum point on its MC curve.
Answer: D
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Refer to the above table. If opportunity costs are constant and the two countries trade
A) the United States should specialize in computers and Mexico in bicycles. B) the United States should specialize in bicycles and Mexico in computers. C) the United States should specialize in both bicycles and computers, and Mexico should specialize in neither. D) there will be no trade because they are so different.
Suppose that a country increased its saving rate. In the long run it would have
a. higher productivity, and another unit of capital would increase output by more than before. b. higher productivity, but another unit of capital would increase output by less than before. c. lower productivity, and another unit of capital would increase output by more than before. d. lower productivity, but another unit of capital would increase output by less than before.