When the value of exports exceeds the value of imports then
A) changes in productivity will occur.
B) international trade is in balance.
C) the country is running a trade deficit.
D) the country is running a trade surplus.
Answer: D
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By using the ceteris paribus assumption in conjunction with a model, economists can
A) suspend the rationality assumption. B) avoid having their model depend on any additional assumptions. C) hold certain factors constant. D) be sure that the model will predict correctly.
In economics, specialization means
a. producing something using only one type of resource, such as labor b. producing something using only one type of labor c. focusing efforts on a particular product or a single task d. producing only one unit of output e. producing something using only one unit of a variable resource
Ryan spends an hour studying instead of going for a bike ride. Assume studying and bike riding were Ryan's only options for that hour. The opportunity cost to him of studying is Choose one answer.
a. the improvement in his grades from studying for the hour. b. the difference between the improvement in his grades and the enjoyment from bike riding. c. the enjoyment and exercise he would have received from bike riding. d. zero since neither activity required Ryan to spend any money. e. the value of the knowledge he gained by studying.
Large disparities in wages could possibly result from all but which one of the following?
A. increases in the amount of middle-class jobs B. globalization C. an increase in the demand for highly skilled labor D. skill-biased technological change E. parental investment in a child's human capital