Suppose Country A and Country B are the only two countries in the world. Country A imports Good X from Country B and exports Good Y. In the absence of any transportation cost, at the world price of Good X
A. Country A's import demand curve will be perfectly inelastic.
B. both Country A's import demand curve and Country B's export supply curve are positively sloped.
C. Country A's import demand curve will intersect Country B's export supply curve.
D. Country B's export supply curve is perfectly inelastic.
Answer: C
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Refer to the scenario above. Suppose Pat can impose a fine of $70 if Joe chooses to keep the money and the cost of imposing such a fine to Pat is $10. Which of the following is likely to happen if Pat is known to be vengeful?
A) Joe will choose to split the money into two parts if Pat gives it to him. B) Joe will choose to keep the entire money for himself if Pat gives it to him. C) Pat will not give the money to Joe. D) An unique equilibrium will not occur.
Suppose the marginal product of labor is MPN = 200 - 0.5N
where N is aggregate employment. The aggregate quantity of labor supplied is 100 + 4w, where w is the real wage. The government imposes a minimum wage of 60. What is the quantity of employment? A) 240 B) 260 C) 280 D) 300
Economies of scale are created by greater efficiency of capital and by
A) longer chains of command in management. B) better wages for labor. C) smaller plant sizes. D) increased specialization of labor.
A curve that represents all combinations of market baskets that provide the same level of utility to a consumer is called:
A) a budget line. B) an isoquant. C) an indifference curve. D) a demand curve. E) none of the above