There will be gains from trade when
A. the buyer values a product more highly than the seller.
B. money is used as a medium of exchange.
C. both the buyer and the seller attach the same value to the product.
D. the buyer values a product less highly than the seller.
Answer: A
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The Plaza Accord of 1985 announces that the
A) G-5 countries will intervene in the foreign exchange market to bring about a dollar appreciation. B) G-7 countries will intervene in the foreign exchange market to bring about a dollar depreciation. C) G-5 countries will intervene in the foreign exchange market to bring about a dollar depreciation. D) G-7 countries will intervene in the foreign exchange market to bring about a DM depreciation. E) G-5 countries will not intervene in the foreign exchange market unless the dollar needs to appreciate.
If the demand curve of a perfect competitor is tangent to (just touching) the firm's average total cost curve,
A. the firm is definitely in the short run. B. the firm is probably in the short run. C. the firm is definitely in the long run. D. the firm is probably in the long run.
Which of the following is a normative statement?
A. An economy with high unemployment can be worse off than an economy with high inflation. B. A decrease in the rate of unemployment will lead to upward pressure on consumer prices. C. An increase in consumer income will lead to increased sales of beef. D. An increase in the income tax will cause a greater reduction in savings than an increase in the sales tax.
Suppose the wage rate in a certain industry rises, yet firms hire more workers. The best explanation of this is that labor:
A. demand fell. B. demand increased. C. supply fell. D. supply increased.