Under which of the following circumstances might a gallon of water be more valuable than a flawless one carat diamond?
a. At a diamond shop next door to a clean public drinking fountain
b. At a diamond shop next door to a typical grocery store selling bottled water.
c. In any U.S. city with safe, clean drinking water.
d. In a life raft with 8 passengers who have been adrift on a remote part of the Pacific Ocean for a week with few prospects of an immediate rescue.
d
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When cost-push inflation starts, real GDP ________ and the price level ________
A) decreases; falls B) does not change; falls C) decreases; rises D) does not change; does not change E) increases; falls
The race-to-the-bottom concept described in the text refers to
A) the situation in which countries with high standards are forced to lower their standards or face the loss of jobs and industry. B) the situation in which human rights are not respected by trading countries. C) adopting the standards of a few selected middle-income and high-income countries. D) the use of low per-capita income as a means of comparing the well-being of individuals. E) None of the above.
The notion that specialization in goods that one can produce at a low opportunity cost will make it possible for trading partners to produce a larger joint output is called
a. the law of absolute advantage. b. the law of comparative advantage. c. the law of production possibilities. d. the exchange maximum principle.
If global prices are lower than domestic prices, the short-run Phillips curve is likely to be horizontal.
Answer the following statement true (T) or false (F)