Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then
A) Chile will produce more computers after trade begins with Brazil.
B) Brazil will produce more timber after trade begins with Chile.
C) Chile will produce more timber after trade begins with Brazil.
D) Brazil will completely specialize in computers once trade begins with Chile.
C
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Describe the main factors economists believe cause inequality of income
What will be an ideal response?
Suppose the quantity of x is measured on the horizontal axis. If the income consumption curve is vertical, then the income elasticity of demand for x is
A) 0. B) 1. C) -1. D) There is not enough information to determine the income elasticity of demand for x.
A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.
If the MPC is .75, then a $50 billion increase in investment would result in an increase in GDP of
A. $50 billion. B. $75 billion. C. $150 billion. D. $200 billion.