To answer the next question, use the following graph showing the domestic demand and supply curves for a specific standardized product in a particular nation.
If the world price of this product is $1, this nation will
A. export all of the product.
B. import all of the product.
C. import some of the product and produce some of the product domestically.
D. neither export nor import the product.
Answer: D
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Refer to Figure 1A.1. Assume that the graph in this figure represents the demand and supply curves for used cars, which are inferior goods. An increase in income would be represented by a shift from
A) Demand 1 to Demand 2. B) Demand 2 to Demand 1. C) Supply 1 to Supply 2. D) Supply 2 to Supply 1.
Structural unemployment usually lasts longer than frictional unemployment
Indicate whether the statement is true or false
Suppose Mexico and the United States are on the gold standard. If there is a half an ounce of gold in the dollar, and one quarter an ounce of gold in the peso, then the exchange rate is
A) $0.50 = 1/2 peso. B) $1 = 1/4 peso. C) $1 = 2 pesos. D) $1 = 4 pesos. E) $1 = 1/2 peso.
If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary
a. surplus will occur and the price will increase. b. shortage will occur and the price will fall. c. surplus will occur and the price will fall. d. shortage will occur and the price will increase.