Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, trade makes both countries better off because in each country
A) wages are higher. B) total consumption of goods is greater.
C) total welfare is greater. D) total employment is greater.
B
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The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are a normal good?
A) from point a to point e B) from point a to point b C) from point a to point c D) from point a to point d
If the demand for eBook readers increases and the supply of eBook readers increases, then
A) it is clear that prices will increase, the change in the quantity of eBook readers sold is ambiguous. B) it is clear that prices will decrease, the change in the quantity of eBook readers sold is ambiguous. C) it is clear that quantity sold will increase, the change in the price of eBook readers is ambiguous. D) it is clear that quantity sold will decrease, the change in the price of eBook readers is ambiguous.
A deadweight loss:
A. can be large in a perfectly competitive market. B. is a reduction in aggregate surplus below its maximum possible value. C. is independent the amount produced and consumed. D. is equal to the difference between total willingness to pay and the total avoidable cost of production.
In the fourteenth century, the Western African Emperor Kankan Musa traveled to Cairo where he gave away much gold, which was in use as a medium of exchange. We would predict that this increase in gold
a. raised both the price level and the value of gold in Cairo. b. raised the price level, but decreased the value of gold in Cairo. c. lowered the price level, but increased the value of gold in Cairo. d. lowered both the price level and the value of gold in Cairo.