If the world price for good A is below the domestic price for good A without trade, then consumer surplus will ________ and total economic surplus will ________ with trade.
A. increase; decrease
B. decrease; increase
C. decrease; decrease
D. increase; increase
Answer: D
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A movement along the AE curve arises from a change in ________, and a movement along the AD curve arises from a change in ________
A) the price level; the price level B) real GDP; investment C) real GDP; the price level D) the price level; investment E) investment; the price level
The relationships between elasticity and total revenue hold because
A. total revenue equals price divided by quantity demanded. B. total revenue equals price times quantity demanded. C. a drop in price has two opposing effects on the two components of the formula. D. both b and c are true.
Which of the following statements regarding black markets is true?
a. The reliability of products sold in black markets is generally higher than the reliability of products sold in legal markets. b. The prices of goods in black markets are generally lower than the prices of similar products in legal markets. c. The laws of supply and demand do not affect the prices of goods exchanged in black markets. d. The rate of violence is higher in black markets than in legal markets.
Cherry picking is the act of
A. admitting the most expensive students, leaving the less expensive ones to public schools. B. employing highly educated teachers, leaving the less educated ones to public schools. C. employing highly experienced teachers, leaving the less experienced ones to public schools. D. admitting students who are easy to educate, leaving the harder ones to public schools.