If country A can produce more of practically everything than can country B, then which of the following statements is true?
A. Trade can benefit both countries.
B. Country B cannot have a comparative advantage in the production of any good that country A wants to buy.
C. Country B has no incentive to trade with country A.
D. Country A has no incentive to trade with country B.
Answer: A
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In the case of a negative externality, the socially optimal output naturally exists if
A. the external costs associated with the negative externality are extremely small. B. the external costs divided by price is equal to price divided by marginal private cost. C. there are no free riders. D. the public good aspects of the negative externality outweigh the costs incurred by the negative externality. E. none of the above
With Panel Data, regression software typically uses an "entity-demeaned" algorithm because
A) the OLS formula for the slope in the linear regression model contains deviations from means already. B) there are typically too many time periods for the regression package too handle. C) the number of estimates to calculate can become extremely large when there are a large number of entities. D) deviations from means sum up to zero.
If the aggregate expenditure line has shifted downward, which of the following is the most likely cause?
a. There have been reports of good economic news. b. The Fed has conducted an open market sale of bonds. c. Income tax rates have been lowered. d. The Fed has conducted an open market purchase of bonds. e. Exports have increased.
Briefly explain how command-and-control regulation works