Olivia bakes cakes and Andrew grows corn. Olivia and Andrew both like to eat cake and eat corn. In which of the following cases is it impossible for both Olivia and Andrew to benefit from trade?
a. Olivia cannot grow corn and Andrew cannot bake cakes.
b. Olivia is better than Andrew at baking cakes and Andrew is better than Olivia at growing corn.
c. Olivia is better than Andrew at baking cakes and at growing corn.
d. Both Olivia and Andrew can benefit from trade in all of the above cases.
d
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Suppose the United States steps up efforts to combat drug trafficking and, with the aid of the Colombian military, destroys a significant percentage of cocaine crops. Predict the impact of increased drug interdiction on the market for cocaine in Los Angeles
a. The supply of cocaine will increase causing the price of cocaine to increase. b. The demand for cocaine will increase causing the price of cocaine to increase. c. The supply of cocaine will decrease causing the price of cocaine to increase. d. There will be a movement up along the supply curve of cocaine.
Which of the following is true about how the "invisible hand" influences economic activity through prices when a product has lower demand than supply?
a. The price must decrease, causing more buyers to buy and less sellers to sell. b. The price must decrease, causing more buyers to buy and more sellers to sell. c. The price must increase, causing less buyers to buy and more sellers to sell. d. The price must increase, causing less buyers to buy and less sellers to sell.
In Keynesian analysis, the level of investment that does NOT depend on disposable income increases is called
A. unplanned. B. irrational. C. discretionary. D. autonomous.
When you buy a hotdog for lunch, you are using money as a
A. store of value. B. medium of exchange. C. unit of accounting. D. standard of deferred payment.