Income inequalities are greatest in
A. Poor countries.
B. Highly developed countries.
C. Countries with many factors of production.
D. Rich countries.
Answer: A
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If a product is a normal good, then its income elasticity of demand is
A) zero. B) positive. C) negative. D) indeterminate. E) greater than 1.
Which of the following theorems predicts that trade benefits the abundant factors of a country and harms the scarce factors?
A) The Stolper-Samuelson theorem. B) The Rybczynski theorem. C) The Heckscher-Ohlin theorem. D) None of the above.
Recent research in growth theory extends the traditional analysis by making the rates of
a. technological change and/or population growth exogenous. b. technological change exogenous and population growth endogenous. c. population growth and/or technological change endogenous. d. population growth exogenous and technological change endogenous.
In a competitive industry buffeted by demand and supply shocks, prices increase and decrease, but economic profits tend to revert to zero. Hence, profits are exhibiting
a. Above-average return b. Positive earnings c. Mean reversion d. None of the above