What would be the most likely effect in the market for OPEC oil if the U.S. were to impose a legal ceiling price on crude petroleum produced domestically? Assume their price is far below the current world price?
A) The demand would decrease.
B) The demand would increase.
C) The supply would decrease.
D) The supply would increase.
E) Only the quantity would change, not the demand or the supply.
B
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A situation where limited resources make it impossible to fulfill all of our wants is known as
A) scarcity. B) opportunity cost. C) a trade-off. D) responding to incentives.
Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40
Jane's consumer surplus from the coffee she buys is ________ per day. A) $1.60 B) $1.70 C) $4.80 D) $6.50
Sara looks into her closet and discovers a pair of like-new shoes she no longer wears because they are out of fashion. From the economist's perspective, was Sara behaving rationally when she bought those shoes?
A. It's not clear because psychology, not economics, deals with the rationality assumption. B. No. If any of a person's decisions have poor results, that person is irrational. C. Yes, Sara didn't buy those shoes when they were out of fashion. D. No. The rationality assumption states that rational people never make mistakes.
Answer the following statements true (T) or false (F)
1) Immigration of workers is an example of a goods and services flow. 2) The United States exports a higher U.S. dollar volume of goods to Canada than to any other nation. 3) Specialized production and international trade increase a nation's productivity and increase the availability of goods and services. 4) A nation has a comparative advantage in some product when it can produce that good at alower domestic opportunity cost than can a potential trading partner. 5) Terms of trade of 1X = 5Y will be acceptable to two countries that have domestic opportunity costs of 1X = 4Y and 1X = 1Y, respectively.