What would happen without the government's protection of property rights?

a.There would be less government regulation of businesses and prices would be lower for consumers.

b.Taxes would be lower, causing less market inefficiencies.

c.Businesses would have less incentive to provide goods and services.

d.Businesses would have more freedom with production processes.

For two people who are planning to trade two different goods, when will there NOT be a comparative advantage for either?

a.if they have exactly the same opportunity cost

b.if one person has an absolute advantage in both products

c.if the terms of trade are such that neither can gain from trade

d.if they have agreed in advance on who will produce what and how much each will produce

Refer to Figure 2-8. What would happen if this economy moved from point F to point C?

a.There would be no gain in either bathtubs or barrels.

b.It is not possible for this economy to move from point F to point C without additional resources.

c.It still would not be producing efficiently.

d.It would be producing more barrels and more bathtubs than at point C.

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