If the opportunity cost is 2X = 1Y for country A and 1X = 3Y for country B, then a possible terms of trade is:
A) 1X = 1/3Y.
B) 1X = 1/4Y.
C) 1X = 1/5Y.
D) 1/2X = 1Y.
Ans: D) 1/2X = 1Y.
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The most important function of middlemen is to
A) act as marketing agents for producers. B) expand the number of jobs in the economy. C) produce valuable information and lower transaction costs. D) protect consumers from exploitation. E) stand between buyers and sellers to control markups.
McDonald's partnership with Beijing's Department of Agriculture provided:
A) McDonald's with subsidies , suppliers, and distributional channels. B) McDonald's with just subsidies. C) McDonald's with just distributional channels. D) all of the above.
As the marginal propensity to consume (MPC) increases, the spending multiplier:
a. increases. b. decreases. c. remains constant. d. becomes indefinable.
Consider Figure 12.3. David chooses to charge a low price:
A. only if Becky chooses a high price. B. only if Becky chooses a low price. C. regardless of whether Becky chooses a high or low price. D. in order to induce Becky to choose a high price.