Asymmetric information will always cause
A) efficiency problems.
B) equity problems.
C) Both A and B.
D) None of the above.
B
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The fact that rubies are more expensive than milk reflects the fact that for most consumers
A) the total utility from rubies exceeds that from milk. B) the marginal utility from rubies equals that from milk. C) more milk is consumed than rubies. D) a quart of rubies is considered to be prettier than a quart of milk.
An example of a public good is
A. a concert by renowned country music star. B. a good that can be used exclusively by one consumer only. C. a local free fireworks display. D. a café latte at Starbucks.
If the U.S. dollar depreciates, in the long run the United States should experience a
A. Larger deficit in the U.S. current account. B. Lower inflation rate. C. Smaller deficit in the U.S. trade balance. D. Larger deficit in the U.S. capital account.
If nation A has an absolute advantage over nation B in the production of a product, this implies that:
A. it requires fewer resources in A to produce the good than in B. B. the cost of producing the good in terms of some other good's production that must be sacrificed is lower in A than in B. C. nation B could not benefit by engaging in trade with A. D. nation A could not benefit by engaging in trade with B.