Suppose Iceland goes from being an isolated country to being an exporter of coats. As a result,
a. consumer surplus increases for consumers of coats in Iceland.
b. producer surplus increases for producers of coats in Iceland.
c. total surplus remains unchanged in the coat market in Iceland.
d. it is reasonable to infer that other countries have a comparative advantage over Iceland in coat production.
b
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An understanding of opportunity costs is important to understanding: a. how to calculate the total revenue generated by a firm. b. how to assess the economic profitability of a firm
c. How to calculate the tax liability of a firm. d. how accountants calculate accounting profits.
When Congress agreed to raise the debt ceiling during the economic meltdown in the United States in 2011, it temporarily averted a shutdown crisis, but the deal they reached to do so created the _____.
A) risk-return relationship B) fiscal cliff C) bottom-up budgeting D) niche barrier
Among the causes of the Great Depression, Keynes would agree with all of the following explanations EXCEPT
A. There was insufficient aggregate demand to achieve full employment. B. There was a lack of investment on the part of businesses because interest rates were too high. C. Supply had not created its own demand. D. Labor unions and businesses resisted wage and price cuts.
Suppose Lois usually buys two cups of coffee for two dollars each and one scone for two dollars each. If the price of scones falls to one dollar each and she now buys two cups of coffee and two scones, this illustrates the
A) substitution effect. B) marginal rate of substitution. C) total utility effect. D) real-income effect.