As the terms of trade approach the domestic opportunity costs of a product, a country will experience:
A. Smaller gains from trade.
B. Greater comparative advantage from trade.
C. Greater absolute advantage from trade.
D. Greater balance-of-trade surpluses.
A. Smaller gains from trade.
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When demand is unit elastic, a 10 percent change in the price of the good
A) will cause a change in quantity demanded of less than 10 percent. B) will cause a change in quantity demanded equal to 10 percent. C) will cause a change in quantity demanded greater than 10 percent. D) will not cause any change in quantity demanded.
Firms will continue to enter a competitive industry until: a. the supply curve is vertical
b. the market price falls below average variable cost. c. any economic profits have been competed away. d. all resources are fully employed.
D. Overstates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes
A. The multiplier effect B. A recessionary gap C. An inflationary gap D. The marginal propensity to save
You took a summer job as a salesperson in a shoe store with the knowledge that you will either make $2,000 or $3,500 with probabilities 0.4 and 0.6 respectively. What is your expected income for the summer job?
A) $2,000 B) $3,000 C) $5,000 D) $2,900