Trade between countries
a. allows each country to consume at a point outside its production possibilities frontier.
b. limits a country's ability to produce goods and services on its own.
c. must benefit both countries equally; otherwise, trade is not mutually beneficial.
d. can best be understood by examining the countries' absolute advantages.
a
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An increase in demand causes
a. a surplus b. excess supply c. an increase in supply d. an increase in equilibrium price and equilibrium quantity e. an improvement in technology
Between 1995 and 2007 in the United States:
A. average U.S. household wealth increased and median household wealth declined. B. average U.S. household wealth declined and median household wealth increased. C. both average and median U.S. household wealth declined. D. both average and median U.S. household wealth increased.
In the classical model, a temporary increase in government purchases causes
A) a decrease in output and the real interest rate. B) a decrease in output and an increase in the real interest rate. C) an increase in output and a decrease in the real interest rate. D) an increase in output and the real interest rate.
Say your girlfriend has received two free tickets to the Sunday movie matinee and she wants you to go with her. Nevertheless, the movie plays at the same time you were planning to watch the football game on the TV. As a rational person you should decide to go to the movie
A. only if it brings you more pleasure than the cost of the tickets. B. always, since the tickets were free. C. only if the pleasure you will gain from it outweighs the pleasure you would gain from watching the football game. D. only if you would gain some pleasure from it.