Suppose that, given the same number of workers, the United States can produce two times as many TVs or 20 times as many potatoes as Chile. Which of the following statements is true?
A. Chile should trade with the United States for potatoes because the United States has an absolute advantage in the production of potatoes.
B. Chile should trade with the United States for TVs because the United States has an absolute advantage in the production of potatoes.
C. The United States can benefit from trading TVs but not potatoes with Chile.
D. The United States has absolute advantage in producing both goods.
D. The United States has absolute advantage in producing both goods.
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Which of the following industries does not fit the natural monopoly model?
A. Fast food restaurants B. Natural gas C. Electricity D. Cable TV
Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is
a. both rival in consumption and excludable. b. neither rival in consumption nor excludable. c. excludable, but not rival in consumption. d. rival in consumption, but not excludable.
When two goods are substitutes, their cross price elasticity of demand
A. infinity. B. negative. C. 0. D. positive.
If a corporation goes bankrupt:
A. neither stockholders nor bondholders receive any money. B. stockholders get paid from the sale of company assets before bondholders do. C. bondholders get paid from the sale of company assets before stockholders do. D. stockholders must honor the debts to bondholders out of personal assets if necessary.