Refer to the following graph.
If this country is producing between point G and Q, it will gain by ________ its production of good A and importing more ________.
A. increasing; good B
B. decreasing; good B
C. increasing; good A
D. decreasing; good A
Answer: D
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According to classical theory, any changes in aggregate demand will
A) have no affect on prices or real Gross Domestic Product (GDP). B) lead to changes in both real Gross Domestic Product (GDP) and the price level. C) lead to changes in the price level. D) lead to changes in real Gross Domestic Product (GDP), but not in the price level.
For a risk averse person, an increase in wealth brings ________ total utility of wealth and ________ marginal utility of wealth
A) higher; higher B) higher; lower C) lower; higher D) lower; lower
From the equation of exchange, if both nominal income and the quantity of money (M) have tripled, while the price level (P) has increased by 50 percent and velocity (V) remains constant, then real output (Y) ________
A) also triples B) increases by 50 percent C) doubles D) decreases by 50 percent E) none of the above
Suppose you own a store that sells top-of-the-line MP3 players. You have determined that the demand function for your MP3 players is Qd = D(P) = 1200 - 4P. At what price would you sell the MP3 players if you wanted to sell 100 of them?
A. $250 B. $275 C. $280 D. $300