Spain allows trade with the rest of the world. We know that Spain has a comparative advantage in producing olive oil if we know that
a. Spain imports olive oil.
b. the world price of olive oil is higher than the price of olive oil that would prevail in Spain if trade with other countries were not allowed.
c. consumer surplus in Spain would exceed producer surplus in Spain if trade with other countries were not allowed.
d. All of the above are correct.
b
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Government stabilization policy would be unnecessary if the economy automatically gravitated toward
A. full inflation. B. full employment. C. full recession. D. an inflationary gap.
In a floating exchange rate system, an increase in the value of the exchange rate could be caused by
a. an increase in taxes. b. an decrease in government spending. c. a decrease in the domestic money supply. d. a decrease in exports.
Refer to Scenario 10.2. How much profit does the monopolist earn?
A) $4512.50 B) $4987.50 C) $475.00 D) $5.00
The distinguishing of products by brand name, color, and other attributes
A) is known as interdependence. B) is known as product differentiation. C) leads to many firms in the market. D) leads to collusion.