New England possessed a comparative advantage in producing cotton. Producers in this region produced cotton at the lowest possible opportunity cost in colonial America
Indicate whether the statement is true or false
False
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Refer to Figure 4-2. What area represents producer surplus at a price of P2?
A) A + B B) B + D C) A + B + C + D + E D) A + B + C
The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is one of the ways the Fed responded?
A) The Fed helped Citibank to acquire General Motors and Chrysler. B) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities. C) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves. D) The Fed banned investment banks from obtaining discount loans.
Institutions are
A) the same thing as organizations. B) associations of individuals or groups. C) always embodied in a written set of rules. D) a set of rules governing behavior, whether written or not. E) only relevant on international issues.
JoAnn considers cola and plain sparkling water to be good substitutes. Suppose the price of sugar, a key ingredient used to produce cola, falls. According to the income effect, which of the following is most likely to occur?
a. JoAnn will purchase less cola and more sparkling water. b. JoAnn will purchase more cola and less sparkling water. c. JoAnn will purchase more of most goods due to her higher real income. d. JoAnn's demand curve will decrease (shift in), causing her to purchase less cola.