For any pair of countries, there is
A. one single exchange rate that will lead automatically to both countries realizing the gains from specialization and comparative advantage.
B. a range of exchange rates that can lead indirectly to one country realizing the gains from specialization and comparative advantage, but not the other country.
C. one single exchange rate that will lead indirectly to one country realizing the gains from specialization and comparative advantage, but not the other country.
D. a range of exchange rates that can lead automatically to both countries realizing the gains from specialization and comparative advantage.
Answer: D
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
In the above figure, suppose the monopolist is producing at Q3. The firm should
A) increase output and decrease price. B) decrease output and increase price. C) not change output or price. D) shut down.
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were an autarky, producers would enjoy area:
A. BCEFG B. G C. EFG D. BCDEFG
Comparing the income effects between salt and housing, the
A. income effect for housing will be greater. B. two income effects will be in the opposite direction. C. income effect for salt will be greater. D. two income effects will be about the same.