The reason that most of the coffee that is consumed in the United States comes from Colombia is that
A) Colombia has an absolute advantage in producing coffee relative to the United States.
B) Colombia has a comparative advantage in producing coffee relative to the United States.
C) coffee cannot be grown in the United States.
D) government trade disincentives regarding Colombian coffee make such trade possible.
Answer: B
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Diamonds are expensive because:
A. they are a form of conspicuous consumption. B. the seller of most diamonds in the world restricts output. C. they are a symbol of luxury. D. very few diamonds are discovered each year.
In the classical model
A. changes in aggregate demand affect only the price level, not real GDP. B. a decrease in aggregate demand will lead to a decrease in the price level and a decrease in real GDP. C. a decrease in aggregate demand will lead to an increase in the price level and a decrease in real GDP. D. changes in aggregate supply leave real GDP unchanged.
Which of the following is an example of a "how much" decision?
A) Octavia is debating whether to buy a pair of Jimmy Choo shoes or Steve Madden boots. B) Humberto has taken a second job to earn money to buy a Harley-Davidson SuperLow Sportster. C) You plan on going to Las Vegas for your birthday and are deciding if you should fly or drive. D) Diana is trying to decide if she should open her pet shop on Sundays.
The four largest firms account for approximately 95% of U.S. cigarette sales. The U.S. cigarette industry would be best classified as a(n)
A. oligopoly. B. monopolistically competitive industry. C. monopoly. D. perfectly competitive industry.