Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. A bundle of goods that Country B could not make would be:
A. (300 iPods, 500 tablets).
B. (400 iPods, 250 tablets).
C. (200 iPods, 750 tablets).
D. (100 iPods, 1,000 tablets).
Answer: B
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Institutions are
A) the same thing as organizations. B) associations of individuals or groups. C) always embodied in a written set of rules. D) a set of rules governing behavior, whether written or not. E) only relevant on international issues.
Firms tend to lower the price of their goods after acquiring a firm that sells a complementary good because
a. They gain market power b. There is an increase in the overall demand for their products c. The bundle has a more elastic demand than individual goods d. The bundle has a more inelastic demand than individual goods
Laissez-faire implies a hands-off approach to the market by the government
Indicate whether the statement is true or false
The idea that bursts of economic activity are based on the introduction of new inventions and innovations is at the heart of
a. the real business cycle theory b. the innovation cycle theory c. the economic theory of radical change d. Adam Smith's economic growth theory e. Keynes's economic growth theory