The law of one price means that prices eventually will be the same in all countries and eventually countries will not have a reason to trade.

Investment in capital goods is one way to increase the standard of living in the future. Investment in capital goods, however, means that we must forgo consumption today. One of the trade-offs facing an economy is consumption today and consumption in the future. The following table presents such a trade-off. With this information we know that the opportunity cost of which of the following is the greatest?  

In election campaigns, presidents often promise more of everything (that is, more guns and more butter). What would help those elected president fulfill that promise?

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Supposed each of the following rows represents the choice faced by policy makers given the current set of U.S. institutions and technology. What is the opportunity cost of reducing unemployment from 8 percent to 4 percent?  

In a market economy, society relies on the self-interest of individuals to determine what, how, and for whom to produce.

The “invisible hand” is the price mechanism that guides people’s actions in the market.

Suppose the marginal cost of dating Perry is $30 and the marginal benefit is worth $40 to you. Following economic reasoning, you should:

Your opportunity cost of taking this course is:

A student who has paid nonrefundable tuition of about $45 a lecture estimates the marginal benefit of each lecture to be $60. What additional information would she need to make a rational decision to attend class?