Refer to Figure 7-3. Without the quota, the domestic price of peanuts equals the world price which is $2.00 per pound. What is the quantity of peanuts demanded by domestic consumers in the absence of a quota?
A) 10 million pounds B) 28 million pounds C) 30 million pounds D) 40 million pounds
D
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The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $10 and the price of a unit of capital is $12, then the economically efficient technique is
A) W. B) X. C) Y. D) Z.
Comparative advantage is determined by the relative levels of autarky prices
Indicate whether the statement is true or false
The opportunity cost of a decision can be examined by using a:
a) production possibilities graph b) factors of production chart c) global trade-off grid d) graph of increasing costs
Answer the following statement true (T) or false (F)
1) If price and total revenue are directly related, demand is inelastic. 2) If price changes and total revenue changes in the opposite direction, demand is relatively elastic. 3) Cross elasticity of demand measures the effect of a change in the price of one product on the quantity demanded of another product. 4) Income elasticity measures the effect of a change in income on the purchases of some good or service. 5) If the coefficient of income elasticity of demand is positive, the product is an inferior good.