The international trade effect states that a(n) ________ in the price level will ________ net exports
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; not affect
Answer: B
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Refer to Table 2-2. According to the law of comparative advantage, both Honduras and Nicaragua could gain if
a. Honduras produced all of the apples and oranges and Nicaragua did not produce anything. b. Honduras specialized in producing apples, Nicaragua specialized in producing oranges, and they traded. c. Honduras specialized in producing oranges, Nicaragua specialized in producing apples, and they traded. d. Nicaragua and Honduras were both were self-sufficient and did not trade.
Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $250 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
The assumed goal of the firms that operate in each of the four market structures discussed in the text is to maximize:
A) sales. B) revenue. C) profits. D) price.
On ________, October 19, 1987, the stock market experienced its worst one-day drop in its entire history with the DJIA falling by 22%
A) "Terrible Tuesday" B) "Woeful Wednesday" C) "Freaky Friday" D) "Black Monday"