Charlotte goes hiking in upper Wisconsin for two weeks. This is an example of ______.
a. nonmarket transactions
b. the underground economy
c. leisure
d. externalities
c. leisure
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Why is the H.O. model called the factor-proportions theory?
What will be an ideal response?
Assume the market is in equilibrium in the graph shown at demand D and supply S1 (at a quantity of 5). If the supply curve shifts to S2, and a new equilibrium is reached (at a quantity of 7), which of the following is true?
A. Total surplus increases by $12.50.
B. Total surplus decreases by $12.50.
C. Total surplus increases by $15.50.
D. Total surplus decreases by $15.50.
Which of the four criteria for an ideal voting system is demonstrated when everyone in a town prefers spending on improved public transportation systems instead of public parks, and transportation spending wins?
A. No dictator B. Unanimity C. Independence of irrelevant alternatives D. Transitivity
Why do symmetric shocks not disturb fixed exchange rate systems?
A) Symmetric shocks happen only once and cause a one-time shift in interest rates. B) Symmetric shocks imply differences in rates of interest, which is irrelevant to fixed exchange rate systems. C) A demand shock can easily be dealt with using domestic policies that do not involve other nations. D) Symmetric shocks require the same medicine in both economies, so monetary policy will be in a direction to help both situations.