A good deal of iron ore is mined in Michigan's Upper Peninsula. What is the relationship between the demand for iron ore and the cost of mining operations in Michigan?
A) Changes in the demand for iron ore are caused directly by changes in the cost of iron mining.
B) Changes in the costs of iron mining are caused by changes in the demand for iron ore.
C) There is no significant relationship because the demand for iron ore is determined by many different people, while the cost of mining the ore is determined by business executives.
D) Nobody knows.
B
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Use of the principle of comparative advantage involves
a. specialization only. b. exchange only. c. both specialization and exchange. d. money only.
If pepperoni pizzas sell for $10 in Berkeley, California, and £10 in London, England, and the exchange rate is $1.35 = £1,
A) the law of one price has been violated. B) either the British government or the American government must be interfering with the market determination of the exchange rate. C) the value of the dollar versus the pound is likely to rise. D) there is no contradiction in the information given because pizza is not a tradeable good.
The fact that people have unlimited wants means that
a. they always want more of at least one good b. each person has an unlimited desire for every good c. labor unions demand wage increases d. selfish people are not concerned about others e. people buy goods without regard to what they can afford
Taxes drive a wedge into the market by raising the price that sellers receive and lowering the price that buyers pay
a. True b. False Indicate whether the statement is true or false