Caroline is an artist. She purchases canvases, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, even though an art lover would pay $4,500 for that painting. How much market value does
Caroline add?
A) $75
B) $1,425
C) $1,500
D) $4,425
Answer: B
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What is the dominant strategy for bidders in an English oral auction?
A) Keep bidding until all other bidders quit, regardless of your reservation price. B) Bid until the previous bid price equals the reservation price of the last bidder. C) Bid until the first-price and second-price bids are equal. D) Stop bidding once the price exceeds your reservation price.
The demand for a product is likely to be more elastic:
a. the smaller the share of the total budget spent on the product. b. when more complementary products are available. c. in the short run than in the long run. d. when more good substitutes for the product are available.
Transfer payments are important for society because
a. the government needs to perform acts of goodwill to maintain citizens' support b. we could not count GDP without them c. they serve to redistribute money from one group of citizens to another d. government investment is an important component of GDP e. they result in lower taxes for citizens
From the data, the USA:
Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. a. has an absolute advantage over India in the production of textiles. b. has an absolute advantage over India in the production of wheat. c. has a comparative advantage in the production of textiles. d. should export textiles to India.