In a two-nation, two-good world, if country A has the comparative advantage in producing good X over country B, then country A:
A. Should not trade with country B
B. Could have the comparative advantage in producing the other good Y as well
C. Must have the comparative disadvantage in producing the other good Y
D. Can produce good X with fewer resources than country B
C. Must have the comparative disadvantage in producing the other good Y
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Allocative efficiency means that
a. firms have maximized production b. all mutually beneficial trades have taken place c. the next unit sold will increase total surplus d. producer surplus is maximized e. no mutually beneficial trades have occurred
Ceteris paribus, the fear among travelers created by the 9-11 attacks would have what impact on the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity. b. an increase in equilibrium price and a decrease in equilibrium quantity. c. a decrease in equilibrium price and an increase in equilibrium quantity. d. a decrease in equilibrium price and a decrease in equilibrium quantity.
When a person's income rises and the tax rate is constant, the tax is a
a. regressive tax b. poll tax c. progressive tax d. head tax e. proportional tax
What are the two most important factors influencing investor preferences?
A. The desire for high rates of return and the thrill of uncertainty. B. The desire for high rates of return and dislike of risk and uncertainty. C. An equal balance between stocks and bonds, and high rates of return. D. Stable rates of return and balance between private and public sector financial assets.