If the cross price elasticity of demand between two commodities is positive, then these commodities are
A) are superior.
B) are complements.
C) are substitutes.
D) are inferior.
Answer: C
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A factory in Techland could not sell 20% of its output during a certain year due to a decrease in demand for its product. Which of the following would have happened if it produced 20% less?
A) Techland's GDP would have been higher. B) Techland's GDP would have been lower. C) Techland's trade deficit would have been less. D) Techland's GDP would have remained the same.
Borrowing from abroad represents:
A) a capital outflow. B) a capital inflow. C) positive net savings. D) none of the above.
Explicit costs would include:
a. rent. b. the interest loss of the business owner on money withdrawn from his/her saving account and invested in the business. c. the loss of rent on a building the business owner owns and uses in his/her business. d. the opportunity costs of the business owner's time. e. the use of tools owned by the business owner and dedicated to the business.
Which of the following statements characterize an oligopoly market? a. Oligopoly firms are guaranteed profits due to the lack of competition
b. Firms are aware that their own economic behavior will influence the decisions of rivals. c. There are few barriers to entry. d. Firms choose price and output independently from the decisions made by competitors.