Two countries have equal population. These countries will have equal income per capita in a particular year if ________
A) the countries have equal inflation rate in that year
B) the GDP of both the countries are equal in that year
C) equal amounts of capital are available in both the countries in that year
D) the size of the working age population in both the countries are equal in that year
B
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Which of the following reasons can explain why purchasing power parity doesn't hold?
A. Transactions costs B. Political pressures C. Fixed prices D. All of these are reasons why purchasing power parity doesn't hold.
Suppose all workers are identical but working for Ajax is more pleasant than working for Acme. In all other nonwage aspects, the two firms offer the same job characteristics. We would expect:
A. wage rates at Ajax to be higher than at Acme. B. wage rates at Ajax to be lower than at Acme. C. wage rates at Ajax and Acme to be the same. D. workers at Ajax would have to be monitored more closely than those at Acme.
Refer to the diagram below of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D2?
A. A decrease in the price of tea
B. An increase in consumer incomes
C. An increase in the prices of cream and sugar
D. A decrease in the price of coffee
Answer the following questions true (T) or false (F)
1. Today, the United States charges an average tariff rate of less than 1.5 percent. 2. The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage. 3. If a country has an absolute advantage in producing a product, it must also have a comparative advantage in producing that product.