Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states. Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.
What will be an ideal response?
North and South added together would have a lower GDP than the United States. Intrastate trade adds to GDP by allowing specialization. Prohibiting trade among the states would force Northern states to grow their own agricultural products and Southern states to produce their own manufactured goods.
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Refer to the table below. Recall that the bidders only know their own private value of the item and they do not know the other participants' private values. Further, assume each participant will submit bids using their optimal strategy. If the participants are bidding in an English auction and the auctioneer sets the opening bid $6 million and increases the bids by $0.25 million until no one
submits a higher bid, Bidder ________ wins the auction and pays ________.
The table above lists the independent private values of five participants in an auction. Each of the bidders only knows their own value and does not know the private values of the other participants.
A) #5; $9.5 million
B) #3; $10 million
C) #3; $9.75 million
D) #5; $9.25 million
Chris just completed his college degree from a prestigious university. He did not go to school to become more productive. Rather, he went to school and completed his degree to convey his innate productivity to employers. To which theory of education does he subscribe?
The effect of a Pigovian tax on a market is:
A. decreased price and quantity to the efficient level. B. decreased price and increased quantity to the efficient level. C. increased price and reduced quantity to the efficient level. D. increased price and quantity to the efficient level.
A firm with total revenue of $500, total cost of $700, and variable cost of $400 should continue to operate its production facility.
Answer the following statement true (T) or false (F)