The terms of trade are acceptable if the price is ________ the seller's opportunity cost and ________ the buyer's opportunity cost.
A. above, below
B. below, below
C. below, above
D. above, above
Answer: A
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All business firms should consider their fixed costs in determining the prices they set.
Answer the following statement true (T) or false (F)
Which of the following is an effect of a minimum wage law that establishes a ceiling wage below the current market clearing wage?
A) Surplus labor, or unemployment B) A decrease in the market clearing wage C) A decrease in the quantity of labor supplied D) An increase in the quantity of labor supplied
Which of the following is likely to have the most price inelastic demand?
a. chocolate b. Godiva chocolate c. Hershey's chocolate d. All three would have the same elasticity of demand because they are all related.
Which of the following is most likely to increase U.S. exports?
a. The government gives subsidies to U.S. firms that export goods or services. b. The government reduces the size of the budget surplus. c. The United States unilaterally reduces its restrictions on foreign imports. d. Taxes on domestic saving rise.