A formal statement of a theory is known as a(n)
A. model.
B. empirical measure.
C. causal statement.
D. positive statement.
Answer: A
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Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of
strawberries. A) raises; increases B) lowers; probably changes, but more information is needed to determine if it increases or decreases C) lowers; increases D) probably changes, but more information is needed to determine if it rises or falls; increases E) raises; probably changes, but more information is needed to determine if it increases or decreases
Refer to Table 2-14. Scotland has a comparative advantage in the production of
A) motorcycles. B) guitars. C) both products. D) neither product.
According to the Heckscher-Ohlin (HO) model the source of comparative advantage is a country's
A) technology. B) advertising. C) factor endowments. D) Both A and C.
Suppose that the federal government levies a 50 cent excise tax on gasoline and that the demand for gasoline is highly inelastic while the supply is highly elastic. Under these circumstances, the burden of the tax
a. will fall primarily on producers. b. will fall primarily on consumers. c. will be split equally between consumers and producers. d. cannot be determined because the burden of a tax is not influenced by the elasticities of supply and demand.