As a result of the superb economics essay that you wrote during this quarter, you won the Adam Smith prize of $100. The receipt of these funds would be an example of
A) the substitution effect being stronger than the income effect.
B) the income effect being stronger than the substitution effect.
C) a pure income effect.
D) a pure substitution effect.
C
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In the market for oranges, the demand and supply of oranges decrease by the same amount. The equilibrium quantity will ________ and the equilibrium price will ________
A) decrease; not change B) decrease; fall C) remain the same; either rise or fall D) remain the same; rise
Use of the principle of comparative advantage involves
a. specialization only. b. exchange only. c. both specialization and exchange. d. money only.
Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon is:
A. 20 bushels of apples. B. 40 bushels of apples. C. 30 bushels of apples. D. 10 bushels of apples.
Research on labor supply generally shows that
A. labor supply rises in response to a permanent increase in the real wage, but falls in response to a temporary increase in the real wage. B. labor supply rises in response to both a temporary and a permanent increase in the real wage. C. labor supply rises in response to a temporary increase in the real wage, but falls in response to a permanent increase in the real wage. D. labor supply falls in response to both a temporary and a permanent increase in the real wage.