The law of demand states that the quantity demanded of a good and
a. the price of a substitute are positively related
b. its price are inversely related
c. its price are positively related if it is an inferior good
d. the wealth of buyers are positively related
e. its price are inversely related if it is a normal good
B
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According to the classical economists' views of the Federal Reserve, the best countercyclical policy is no countercyclical policy
Indicate whether the statement is true or false
Quebec is capable of producing 10 pallets of wood shingles or 8 barrels of maple syrup with a unit of labor. Vermont is capable of producing 12 pallets of wood shingles or 12 barrels of maple syrup with a unit of labor. Assume that this is typical of
the labor force as a whole. Which location has the absolute advantage and which has the comparative advantage, in the production of each good? Can these locations reap gains from trade?
An increase in spending increases nominal and real wages, but as prices rise:
A. nominal wages begin to fall. B. both nominal and real wages begin to rise. C. real wages begin to fall. D. neither nominal nor real wages are affected.
When a perfectly competitive firm is in long-run equilibrium, economic profits
A. are zero. B. are negative. C. are positive. D. may be positive, zero or negative depending upon costs.