If nations begin to expand their specialization in production for the purpose of trade,
a. consumer surplus will increase, but not total output
b. total world output will increase, and consumer surplus will increase as well.
c. total world output will increase, but consumer surplus will not increase.
d. neither total output nor consumer surplus will change.
b
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The majority of money is created when
A) banks make loans. B) new coins are minted. C) the federal government borrows from the public. D) the Fed sells bonds.
Suppose that the price elasticity of demand for wheat is known to be -0.75. Will a good wheat crop (which increases the supply of wheat) be likely to increase or decrease the revenues of farmers? Carefully explain
What will be an ideal response?
Which of the following was true of countries willing to join the euro?
A. The countries had to maintain a debt to GDP ratio of more than 60 percent. B. The countries had to maintain bank balances in their home currencies. C. The countries had to lose the eligibility to participate in foreign trade. D. The countries had to give up the ability to use monetary policy as individual countries.
Exhibit 5-7 GDP data (billions of dollars) Personal consumption expenditures$5,207 Interest425 Corporate profits735 Government spending1,406 Depreciation830 Rental income146 Gross private domestic investment1,116 Compensation of employees4,426 Exports870 Imports965 Indirect business taxes553 Proprietors' income520 Personal taxes886 Social Security taxes432 Transfer payments376 In Exhibit 5-7, disposable personal income (DI) is:
A. $5,127 billion. B. $5,608 billion. C. $6,254 billion. D. $6,495 billion.