A country that does not engage in international trade is likely to face a problem because:
a. some industries are too small to be efficient if restricted to their domestic markets alone.
b. it cannot produce along its production possibilities frontier
c. domestic producers face a fluctuating demand for their products.
d. it cannot consume at a point below its production possibilities frontier.
a
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The difference between exports and imports of goods is the
A) balance of trade. B) balance of payments. C) balance of accounts. D) balance of paying.
Income elasticity of demand reflects
A) the change in total quantity demanded divided by the total change in income. B) the responsiveness of the quantity demanded to changes in income, adjusting its relative price so real income does not change. C) the responsiveness of income of producers to a change in quantity sold of the good. D) the responsiveness of demand to changes in income.
A perfectly competitive industry's market or "going" price is established by
A) the largest firm in the industry. B) the largest purchaser of this industry's output. C) each individual producing firm and reflects that firm's costs. D) the forces of supply and demand.
According to the adaptive expectations theory, people form their expectations of the future on the basis of recent experiences
a. True b. False Indicate whether the statement is true or false