same drugs.

8. Public enterprise means the factors of production (resources and businesses) are owned and operated by

the government.

9. The United States is a large country economically speaking, so it has less need to trade internationally

than the other countries mentioned. (This is the same reason that France and Italy have lower ratios than

Belgium or Sweden.) One additional reason is that each of the other countries is a member of the European

Union, where trade between members occurs without barriers to trade, like tariffs and quotas.

Chapter 2

1. The opportunity cost of bus tickets is the number of burgers that must be given up to obtain one more bus

ticket. Originally, when the price of bus tickets was 50 cents per trip, this opportunity cost was 0.50/2 = .25

burgers. The reason for this is that at the original prices, one burger ($2) costs the same as four bus tickets
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