For country A, an import is a good produced in:
A. country B and purchased by residents of country B.
B. country B and purchased by residents of country A.
C. country A and purchased by residents of country B.
D. country A and purchased by residents of country A.
Answer: B
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Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue's short run costs?
A) Short run variable costs would increase. B) Short run fixed costs would decrease. C) Short run total costs would decrease. D) Short run average fixed costs would increase.
A public university knows that demand from potential students is elastic. If the university wants to increase tuition revenue, it should
a. raise its tuition rate b. hold its tuition rate constant and increase faculty salaries c. increase its financial aid d. lower its tuition rate e. increase its enrollment
The situation when we face alternative choices is called abundance.
a. true b. false
Insurance companies are not permitted to require AIDS tests as a precondition for coverage, so they do not know whether or not the people they insure have already contracted HIV (the virus that causes AIDS). This situation is an example of
a. signaling. b. adverse selection. c. the principal-agent problem. d. moral hazard.