General equilibrium considerations lead to the realization that import-substituting policies have the effect of
A) discouraging exports.
B) encouraging exports.
C) encouraging an efficient use of a country's resources.
D) generating large tariff revenues for the government.
E) creating competitive manufacturing sectors.
A
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If an individual's income rises 40 percent and his clothing purchases increase 50 percent in response, the income elasticity for clothing by the individual is
A) -0.8. B) 0.8. C) 1.25. D) -1.25.
If the income elasticity of demand of houses is exactly 1.40 . Due to a recession, you expect incomes to drop by 25% next year. How will consumers adjust their purchase for houses?
a. Buy 35% more houses b. Buy 35% less houses c. Buy 25% more houses d. Buy 25% less houses
The major component of all activities once a crop, livestock, or fiber product leaves the farm gate is
A) labor. B) advertising. C) packaging and transportation. D) none of the above.
Costa Rica is a leading exporter of bananas. What explains the comparative advantage of this country in banana production?
A) climate and soil conditions in Costa Rica which are well-suited for banana production B) investment by multinational firms such as Chiquita Brands International and the Dole Food Company C) a large supply of unskilled labor D) positive externalities