The most important characteristic of the equilibrium price is that it
a. guarantees that producers earn profit
b. clears the market, leaving neither a surplus nor a shortage
c. maximizes the quantity demanded
d. minimizes the quantity demanded
e. guarantees that all buyers who desire the product will get it
B
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Suppose that in Germany, the opportunity cost of producing a gallon of beer is 5 gallons of wine. In Italy, the opportunity cost of producing a gallon of beer is 3 gallons of wine
a. What is the opportunity cost of producing a gallon of wine for Germany? b. What is the opportunity cost of producing a gallon of wine for Italy? c. Which country has a comparative advantage in the production of beer? d. Which country has a comparative advantage in the production of wine?
The average height of a professional basketball player is 6 feet, 2 inches while the average height of a professional jockey is 5 feet. If we translate this information into the context and concepts associated with international trade, we can say that
a. each has an absolute advantage over the other in their professional sport b. because of the height advantage, the basketball player can do both better than the jockey, but has a comparative advantage in basketball c. because of the height disadvantage, the jockey has no absolute advantage d. basketball is a more efficient sport than horse racing e. racing is a more efficient sport than basketball
Making rational decisions "at the margin" means that people
a. make those decisions that do not impose a marginal cost. b. evaluate how easily a decision can be reversed if problems arise. c. compare the marginal costs and marginal benefits of each decision. d. always calculate the dollar costs for each decision.
Table 9.1Disposable IncomeTotal Consumption(Billions of dollars per year)(Billions of dollars per year)$0$50200210At which income level does consumption equal income according to the information provided in Table 9.1?
A. $150 billion. B. $600 billion. C. $250 billion. D. $900 billion.