Which of the following statements is true?
A) All rational economic agents attempt to maximize their income.
B) A rational consumer makes his decisions depending on what the majority chooses.
C) A budget constraint is an economic tool that quantifies the trade-off between consumption of two goods.
D) A trade-off refers to the exchange of goods between economic agents through a barter system or mutual exchange.
C
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Which of the following is the most likely reason for countries to engage in international trade based upon specialization of production?
A. Relative exchange rates B. Relative levels of GDP C. Relative inflation rates D. Comparative advantage
The exchange rate between currencies of different countries is controlled primarily by ________ in currency markets
A) the outsourcing agreements B) supply and demand C) diplomatic relations D) tariff rates
Which of the following statements regarding the long-term equilibrium is TRUE?
A) As new firms enter a market, each existing firm increases the quantity it produces. B) Firms leave a market if they are making zero economic profit. C) Entry and exit stop when firms are making an economic profit. D) Entry and exit stop when firms make zero economic profit.
Which of the following labor markets is more likely to be competitive?
A) Receptionists B) Singers C) Soccer players D) Sculptors