Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and food is relatively land-intensive. If the countries engage in free trade, Alpha will
A. import both goods.
B. export food and import drink.
C. export drink and import food.
D. export both food and drink.
Answer: C
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The "Economics in Action" in the text mentions that the elasticity of demand for agricultural products is 0.42. If a drought boosts the price of corn 25 percent, then we can calculate the quantity of corn demanded ________
A) increased by 10.5 percent B) decreased by 10.5 percent C) increased by 8.4 percent D) decreased by 8.4 percent
According to the text, which of the following is a principal reason why firms merge?
a. to form a cartel b. to exercise greater market control c. to increase their product differentiation d. to decrease their product differentiation e. to become a monopoly
Let TC(Q) = 10 + Q; MC equals
A. 1. B. 10. C. 11. D. It cannot be determined from the information given
Which of the following examples would most likely involve a person earning minimum wage?
a. Fifty-year-old Koki works as marketing specialist for 20 years. b. Twenty-year-old Catherine works as an office assistant for a large corporation. c. Fifteen-year-old Sean works as a caddy while his parents earn $100,000 a year. d. Thirty-year-old Tamar works in a factory while her husband teaches high school.