If the government were to decrease its spending, it would expect aggregate demand to:
A. fall, and thus GDP to fall.
B. rise, and thus GDP to fall.
C. fall, and thus GDP to rise.
D. rise, and thus GDP to rise.
A. fall, and thus GDP to fall.
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Private producers have no incentive to provide public goods because
A) they cannot avoid the tragedy of the commons. B) production of huge quantities of public goods entails huge fixed costs. C) once produced, it will not be possible to exclude those who do not pay for the good. D) the government subsidy granted is usually insufficient to enable private producers to make a profit.
Prices of California Merlot wine (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen
Which of the following best explains the rising prices of California Merlots? A) The supply curve for Merlot has shifted to the right while the demand curve for Merlot has shifted to the left. B) The demand curve and the supply curve for Merlot have both shifted to the left. C) The demand curve for Merlot has shifted to the right more than the supply curve has shifted to the right. D) The supply curve for Merlot has shifted to the right more than the demand curve has shifted to the right.
Refer to the table above. Country A has absolute advantage in
A) Good X. B) Good Y. C) Neither X nor Y. D) Both X and Y.
"Ceteris paribus" is a Latin expression that means "holding everything else constant."
a. True b. False Indicate whether the statement is true or false