In the figure below, AB is the production-possibility curve of Canada. I1 and I2 are two of the community indifference curves of Canada. With free trade, the international price ratio is 0.25 bushel of wheat/bale of cotton, and Canada will import:
A. eighty bushels of wheat.
B. twenty bushels of wheat.
C. forty bales of cotton.
D. sixty bales of cotton.
Answer: D
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An In the News article titled "Caterpillar vs. the IAM" describes collective bargaining as
A. Direct negotiations between employers and labor unions. B. Government intervention to end a strike. C. Negotiations between workers and labor union organizers. D. The competition between labor unions for workers.
At any level of output
A. average total cost will exceed average variable cost by the amount of the average fixed cost. B. marginal cost will exceed average variable cost by the amount of the average fixed cost. C. average variable cost will exceed average total cost in the short run. D. average variable cost will exceed average fixed cost by the amount of the average total cost.