If the opportunity cost of corn to wheat is 3:1 in the United States and 5:1 in France, only the United States would benefit from trade if the actual terms of trade between corn and wheat were 2:1.
Answer the following statement true (T) or false (F)
False
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In practice, price discrimination is never perfect. Why?
What will be an ideal response?
Assume the economy is initially in equilibrium where potential GDP is greater than real GDP
If the expected inflation rate, the term structure effect, and the default-risk premium are constant, a decrease in the Fed's target short-term nominal interest rate will ________ the MP curve and the output gap will become ________. A) shift up; smaller B) shift up; larger C) shift down; smaller D) shift down; larger
An example of a cost externality occurs when a mining company
A) dumps waste in river upstream from a popular fishing spot. B) produces coal that is not in demand in a recession. C) underpays its employees. D) overwork its employees.
A fixed-proportion production function has isoquants that are
a. almost flat (i.e., the isoquants are almost straight lines). b. L-shaped. c. normally shaped (rectangular hyperbolas). d. None of the above.