Figure 5.4In Figure 5.4, supply elasticity is infinite in graph:
A. A.
B. B.
C. C.
D. D.
Answer: B
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If India has an absolute advantage in rug production when compared to England, then:
a. India should export rugs to England. b. England should export rugs to India. c. international trade should not occur. d. England uses fewer resources to produce rugs than India. e. India uses fewer resources to produce rugs than England.
Suppose the price of wine in Berylia is higher than the world price of wine. If the market for wine is opened to international trade, how will the total surplus in the market get affected?
Banks cannot influence the money supply if they are required to hold all deposits in reserve
a. True b. False Indicate whether the statement is true or false
Water has a higher total utility (usefulness) than diamonds, but it is much less expensive than diamonds. This is because whereas diamonds are rare, water is plentiful, making the marginal utility of diamonds much higher than the marginal utility of water. What are two other goods that you can think that demonstrate that price is determined not by total utility but by marginal utility? Explain how these goods demonstrate the same principles.
What will be an ideal response?