Refer to Figure 2-11. Which country has a comparative advantage in the production of cotton?
A) Pakistan B) Indonesia
C) They have equal productive abilities. D) neither country
B
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Under perfect competition, if an industry is characterized by positive economic profits in the short run:
a. firms will leave the market in the long run and the short-run supply curve will shift outward. b. firms will enter the market in the long run and the short-run supply curve will shift outward. c. firms will enter the market in the long run and the short-run supply curve will shift inward. d. firms will leave the market in the long run and the short-run supply curve will shift inward.
Which statement about the economic impact of immigration is true?
a. State and local governments bear most of the costs of immigration. b. The federal budget pays the costs associated with educating immigrants. c. Immigration tends to have a positive effect on state and local budgets. d. Immigration tends to have a negative effect on the federal budget.
A decrease in the price of rice from 50 cents to 40 cents a pound increases consumption from 16 to 20 tons a week in Gainesville and from 160 to 200 tons in the larger city of Miami. The elasticity of demand for rice is
a. greater in Miami than in Gainesville, even taking into account the population difference. b. greater in Gainesville than in Miami in spite of the population difference. c. equal in Gainesville and Miami regardless of the population difference. d. impossible to compare because of the population difference.
A firm ________ if it earns zero economic profit.
A. will leave the industry B. earns a positive but below normal rate of return C. earns exactly a normal rate of return D. earns a negative rate of return