To have an effective price support program, the government must
i. isolate the domestic market from the world market.
ii. pay the farmers a subsidy.
iii. introduce a price floor.
A) i only
B) ii only
C) iii only
D) ii and iii
E) i, ii, and iii
E
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Refer to Table 2-31. This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland
a. Which country has an absolute advantage in the production of cell phones? b. Which country has an absolute advantage in the production of lumber? c. What is Estonia's opportunity cost of producing one cell phone? d. What is Finland's opportunity cost of producing one cell phone? e. What is Estonia's opportunity cost of producing one board foot of lumber? f. What is Finland's opportunity cost of producing one board foot of lumber? g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce cell phones? h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce lumber?
How is a monopolistically competitive firm likely to respond to fluctuations in demand in the short run?
A) by selling more or less at the posted price B) by changing prices C) by reducing menu costs D) by increasing menu costs
An equilibrium price is unaffected by nonprice factors
a. True b. False Indicate whether the statement is true or false
Other things being equal, when the money price of a good increases, its relative price
A) stays the same. B) increases. C) decreases. D) falls to zero.