A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________
A) decrease; increase
B) decrease; decrease
C) increase; decrease
D) increase; increase
C
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Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?
A) Fewer firms to compete with B) Lower prices for many goods C) Increase in the volume of exports and imports D) Increase in production levels E) Improved overall economic welfare
If a person is risk neutral, then she
A) is indifferent about playing a fair game. B) will pay a premium to avoid a fair game. C) has a horizontal utility function. D) has zero marginal utility of wealth.
When comparing across countries, the higher the rate of saving
A) the lower the level of per capita real Gross Domestic Product (GDP). B) the higher the level of per capita real Gross Domestic Product (GDP). C) the less industrialized the country. D) the lower the productivity rates.
Larissa is a famous attorney with a great reputation in court. She charges her clients $300 for each hour she spends working on their cases. If she earned $450,000 in hourly wages last year, and by raising her rates to $350 per hour her income increased to $490,000 what can we say about the elasticity of demand for Larissa's legal services?
a. It is approximately equal to 2.3. b. It is approximately equal to 1.6. c. It is approximately equal to 1.0. d. It is approximately equal to 0.45. e. It is approximately equal to 0.1.