Which of the following describes a surplus-enhancing transaction?
A. Your state government imposes a higher minimum wage than the one set by federal law.
B. A person pays $10.00 to buy a scoop of ice cream at a baseball game.
C. The Federal government taxes the wealthy to pay for programs to help the poor.
D. A firm lays off 25 workers in order to cut costs.
Answer: B
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The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of
A) trade-off. B) equity. C) efficiency. D) optimization.
Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specializes and then trades with the other. If the price starts at four hats per doormat, and then increases to five hats per doormat, then:
a. people in Portugal will not want to buy as many hats. b. Spain no longer has a comparative advantage in hats. c. Portugal is flooding the market with too many doormats. d. some of the gains from trade shift to Portugal. e. some of the gains from trade shift to Spain.
What is a multilateral exchange rate?
a. It is an exchange rate that is measured by using a number of different techniques. b. It is an exchange rate that calculates the overall movement of the rate against more than just one other currency. c. It is an exchange rate that is measured once every 10 years. d. It is a rate that is set by the IMF for many different nations.
The supply of labor generally is considered to be downward-sloping because the opportunity cost of leisure decreases as wages increase.
Answer the following statement true (T) or false (F)