If an economy is producing inefficiently, it is
A. possible to increase production of all goods simultaneously.
B. possible to increase production of one good at the expense of another.
C. not possible to increase production of any good.
D. not possible to increase economic growth.
E. possible to increase production with no effort.
Answer: A
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As the payments system evolves from barter to a monetary system,
A) commodity money is likely to precede the use of paper currency. B) transaction costs increase. C) the number of prices that need to be calculated increase rather dramatically. D) specialization decreases.
Figure 4-8
Refer to . The supply curve S1 and the demand curve D indicate initial conditions in the market for soft coal. A $40-per-ton tax on soft coal is levied, shifting the supply curve from S1 to S2. Imposing the tax increases the equilibrium price of soft coal from
a.
$20 to $60 per ton.
b.
$20 to $50 per ton.
c.
$50 to $60 per ton.
d.
$50 to $90 per ton.
U.S. firms can produce and sell electric fans for $25. The United States can also import electric fans from China at $40 each and from Canada at $45 each. Electric fans made in the United States, China, and Canada are identical. Currently, the United States imposes a 30% tariff on imported electric fans. For the United States, are there trade diversion losses, trade creation gains, or both as a result of the formation of NAFTA?
a. There are only trade diversions losses b. There are only trade creation gains. c. There are neither trade creation gains nor trade diversion losses. d. There are both trade creation gains and trade diversion losses.
When a worker and firm are matched on the hedonic wage function, it is implied that
A. the firm could increase its profits by offering a safer job as doing so would allow the firm to lower the wage it pays. B. the hedonic wage function must be very steeply sloped to ensure that the worker does not accept a better paying job. C. the worker receives no surplus from the match. D. the worker-firm match is efficient in the sense that neither the worker nor the firm could become better off with a different match. E. the worker cannot receive a higher wage at any other firm.