Question

Question 5

What can be used to explain why countries may not always benefit from the specialization in producing fewer goods and services?

Question 5 options:

	For a given firm, producing at an extremely high scale may embrace higher average cost of production.
	For a given firm, producing at an extremely high scale should cause the total production cost to be greater than the total revenue.
	For a given country, producing fewer products at extremely high production scales should lower the country's potentials to engage in international trade.
	For a given country, producing fewer products at extremely high production scales should increase the country's potentials to engage in international trade.

Question 6

For a country X producing only two products, A and B, the production possibilities curve (PPC) can be used to show that the implicit opportunity cost of producing A should always be declining.

Question 6 options:

	True
	False

Question 7

For a country X producing only two products, A and B, when other things remain equal, points along the country's production possibilities curve (PPC) can be used to show which of the following?

Question 7 options:

	The opportunity cost of producing A is how many units of B should be sacrificed to increase A by one unit.
	The opportunity cost of producing A is the change in B that results from one unit change in A.
	The opportunity cost of producing one unit of A is how many units of B should be sacrificed.
	All of the above is true.

Question 8

If the US government believes that the minimum wage is too low in almost all states, what should the government consider before going forward to raise the current federal minimum wage?

Question 8 options:

	Only the social costs associated with increasing the federal minimum wage.
	Only the economic costs associated with increasing the federal minimum wage.
	All possible costs and benefits associated with increasing the federal minimum wage.
	Nothing to consider, because there are no costs associated with increasing the federal minimum wage.

Answer 1

5) For a given country, producing fewer products at extremely high production scales should lower the country's potentials to engage in international trade.
Their exports will be limited and there will always remain a risk that global demand may shift away from them

6) False
Opportunity cost may increase/ remain constant depending upon PPF

7) All of the above is true.

8) All possible costs and benefits associated with increasing the federal minimum wage.
Cost and benefit analysis for the decision must be carried out