The U.S. can produce pizza for $7.50 each and barrels of beer for $37.50 each, and Germany can produce pizza for €5 each and barrels of beer for €15 each (€ is the symbol for the euro, the currency Germany uses). If the exchange rate is 1
50 $/€ then A) the U.S. has a comparative advantage in the production of beer.
B) neither country has a comparative advantage in the production of beer.
C) the U.S. has a comparative advantage in the production of pizza.
D) the U.S. has a comparative advantage in the production of beer and pizza.
C
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If the government grants a firm a public franchise to supply coal, a monopoly is created by
A) a natural barrier to entry. B) a legal barrier to entry. C) price discrimination. D) All of the above answers are correct.
The price elasticity of demand between rifles and bullets is likely to be:
a. negative, because the goods are complements. b. positive, because the goods are complements. c. negative, because the goods are substitutes. d. positive, because the goods are substitutes.
If a meat shop owner sells meat to a restaurant and, in the evening, visits the same restaurant to enjoy some barbeque, then the amount paid by the meat shop owner to the restaurant will be counted twice in the GDP
a. True b. False Indicate whether the statement is true or false
If demand falls and supply falls, equilibrium price will _____ and equilibrium quantity will _____.
Fill in the blank(s) with the appropriate word(s).