The terms of trade is defined as:
a. the quantity of inputs sacrificed to produce each unit of a good.
b. the quantity of one good that is exchanged for a quantity of another good.
c. the ratio of the total cost of production of individual traders.
d. the marginal cost of producing one good as a percentage of the marginal cost of another good.
e. the ratio of total exports of a nation to its total production.
b
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Refer to Figure 2. All else equal, a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from
a. x to y. b. y to x. c. SA to SB. d. SB to SA
If losses are unavoidable in an uncertain world, then
A) profits are too. B) profits are only the result of good luck. C) profits are avoidable. D) profits are the result of people acting with perfect information.
Price discrimination exists:
A. only in perfectly competitive markets. B. because sellers try to exploit differences in customers’ willingness to pay. C. in all industries, regardless of market structure. D. only when demand is inelastic.
When you find the answer to your problem but settle for something else is an example of the
a. implicit favorite model b. bounded rationality model c. econological model d. none of the above