law of comparative advantage
What will be an ideal response?
The total output of a group of individuals, an entire economy, or a group of nations will be greatest when the output of each good is produced by whoever has the lowest opportunity cost.
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Macroeconomics often relies on microeconomic analysis because
A) microeconomics is older than macroeconomics. B) microeconomic theory can be tested and macroeconomic theory cannot be tested. C) all aggregates are made up of individuals and firms. D) the effects of macroeconomic subjects such as inflation and unemployment are independent of individual consumers and firms.
Natural Gas Boom Technological improvements in hydraulic fracturing, or "Fracking," have decreased the cost of extracting smaller pockets of natural gas. What affect does this have on supply and demand as well as on the equilibrium price and quantity?
When her income increased from $10,000 to $20,000 . Heather's consumption of macaroni decreased from 10 pounds to 5 pounds and her consumption of soy-burgers increased from 2 pounds to 4 pounds. We can conclude that for Heather, macaroni
a. and soy-burgers are both normal goods with income elasticities equal to 1. b. is an inferior good and soy-burgers are normal goods; both have income elasticities of 1. c. is an inferior good with an income elasticity of -1 and soy-burgers are normal goods with an income elasticity of 1. d. and soy-burgers are both inferior goods with income elasticities equal to -1.
In the short run, money affects the economy through _____
Fill in the blank(s) with the appropriate word(s).