What three predictions of new trade theory regarding trade patterns are supported by studies? (Check all that apply.)
What will be an ideal response?
Trade increases the variety of products available.
Trade increases the specialization of production within an industry.
Trade leads to lower average costs.
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Firms in monopolistic competition have rivals that
A) match their price increases. B) match their price decreases. C) agree on a common price. D) set their prices according to the demand curves they face.
Which of the following will cause a decrease in consumer surplus?
a. an increase in the number of sellers of the good b. a decrease in the production cost of the good c. sellers expect the price of the good to be lower next month d. the imposition of a binding price floor in the market
The substitution effect of a wage decrease in the work-leisure model results in the worker choosing to
a. work less than before. b. work more than before. c. possibly work more or less than before. d. work more with a higher level of consumption.
GDP is the total market value of:
a. All expenditures on natural resources, labor, and capital goods in an economy in a given year b. All intermediate goods and services produced in an economy in a given year c. All final goods and services produced in an economy in a given year d. All expenditures on consumption, investment, and net exports in an economy in a given year