If the opportunity cost of producing a ton of coffee in the U.S. is twenty tons of rice, while the opportunity cost of producing a ton coffee in Costa Rica is four tons of rice, and the terms of trade are ten tons of rice delivered per ton of coffee received,
A. the U.S. can benefit by trading rice to Costa Rica for coffee.
B. the U.S. can benefit by trading rice to Costa Rica for coffee, and Costa Rica can benefit by trading coffee to the U.S. for rice.
C. Costa Rica can benefit by trading rice to the U.S. for coffee.
D. Costa Rica can benefit by trading coffee to the U.S. for rice.
Answer: B
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If there is a decrease in market demand for a product exchanged in a perfectly competitive industry, it results in an industry contraction that will end when the product price is
A. less than the marginal cost faced by the firms. B. greater than the marginal cost faced by the firms. C. equal to the marginal cost faced by the firms. D. greater than the average cost faced by the firms.
The purpose of fiscal policy should be to
a. balance the budget to be fiscally responsible. b. balance aggregate supply and aggregate demand. c. keep taxes low to keep voters happy. d. minimize government spending to avoid wasting money.
When shopping online, as part of the check-out process, companies often have a box checked automatically that states you want to receive promotional e-mails from them. The directions instruct you to uncheck the box if you do not wish such correspondence. This practice is a good example of:
A. time inconsistency. B. endowment bias. C. status-quo bias. D. endowment effect.
If the demand for a good decreases because consumer income increases, the good is a(n):
A. inferior good. B. normal good. C. necessity good. D. luxury good.