Author Question: Consider a PPC with automobiles on the vertical axis and cotton on the horizontal axis. The ... (Read 71 times)

Capo · **on:** Jun 30, 2018

Consider a PPC with automobiles on the vertical axis and cotton on the horizontal axis. The discovery of a new fertilizer that improves crop yield will shift:
a. the vertical intercept up but will not shift the horizontal intercept.
b. the horizontal intercept to the right but will not shift the vertical intercept.
c. the horizontal intercept to the left and the vertical intercept upward.
d. the vertical intercept downward and the horizontal intercept to the right.
e. neither the horizontal intercept nor the vertical intercept.

Question 2

Which of the following is true?
a. Voluntary trades give both parties more in value than what they give up.
b. Without the ability to trade, people would not tend to specialize as much in those areas where they had a comparative advantage.
c. People can gain by specializing in the production of the good in which they have a comparative advantage.
d. All of the above are true.