Suppose the opportunity cost is a constant 500 TV sets for 1 car in Canada and 1,000 TV sets for 8 cars in Mexico. Then, if both countries specialize in accordance with their comparative advantage, the production of 1,000 extra TV sets in one country and 1,000 fewer TV sets in the other would imply that the world as a whole can have
a. 2 more cars
b. 6 more cars
c. 8 more cars
d. 125 more cars
e. 500 more cars
B
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If either the supply or the demand curve in a goods market is very elastic, a per-unit tax will end up not raising very much revenue.
Answer the following statement true (T) or false (F)
The __________________is the sum of the fixed and variable costs.
Fill in the blank(s) with the appropriate word(s).
According to the text, the term "Eurosclerosis" refers to
a. The cumulative effects of high productivity growth in Europe. b. Stagnant economic growth in Europe. c. A long period of higher growth rates among European countries than the growth rates of the United rates. d. The differing views about the growth rates of European countries.
As fiscal consolidation takes place, the central bank should
A) decrease the policy rate. B) increase the policy rate. C) increase inflation rate. D) decrease money supply.