Rational people

A-undertake an action if it has positive economic surplus

B-might correct calculates marginal costs

C-ignore scarcity in decision making

D- might correctly calculates marginal benefits

Benefits from trade increase when

A-One party s PPC is as flat as possible whereas the others is as steep as possible

B- Each party acts in accordance with his or her absolute advantage

C-Trading partners have similar opportunity costs

D-Each party s PPC is very similar

Absolute advantage refers to

A-someone who has higher opportunity costs

B-lower opportunity costs

C-the fact that one has lower production costs

D-comparative advantage

An economic model

A- does not have restrictive assumptions

B- relies heavily on simplifying assumptions

C- lacks essential features of a situation

D- completely and perfectly describes the situation it considers

In a free market system, what coordinates the actions of millions of people with their varying abilities and desires?"

A. prices

B. consumers

C. price control authority

D. the government

Value of marginal product or labor refers to?

A. the fact that higher real prices increases employment

B. VMPN-P*MPN

C. the price of the worker 5 output

D. the productivity or workers