According to ________, trade between two countries allows each of the trading countries to allocate its resources most efficiently.
A. the Heckscher-Ohlin theorem
B. the theory of absolute advantage
C. the theory of comparative advantage
D. the General Agreement on Tariffs and Trade
Answer: C
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If the demand and supply both increase equally, then the equilibrium price ________, and the equilibrium quantity ________
A) increases; increases B) does not change; increases C) decreases; does not change D) increases; does not change E) increases; decreases
Suppose earnings are given by E = $60 + $7(24 ? L), where E is earnings and L is the hours of leisure. The fixed payment for this worker is:
A. $60. B. $24. C. $0. D. $7.
A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of
A. cynical behavior in modern democracies. B. a concern that people are not rational when they make decisions. C. failing to consider the alternatives available to the government. D. using incentives to alter behavior.
Suppose the Fed sells $100 of government securities. If the desired reserve ratio is 20 percent and there is no currency drain, then the quantity of money
A) decreases by $500. B) decreases by $80. C) decreases by $400. D) decreases by $100. E) increases by $100.