Refer to the accompanying figure, which shows the annual domestic supply and annual domestic demand for jeans in a small country.
Suppose this country initially does not trade with the rest of the world. If the world price of a pair of jeans is $40, and this country opens itself to trade, then the annual domestic production of jeans will:
A. increase from 20,000 to 28,000.
B. fall from 20,000 to 4,000.
C. fall from 28,000 to 4,000.
D. increase from 4,000 to 28,000.
Answer: B
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Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
Suppose a timing element is added to the game, and that Jordan buys a ticket first. Then, after seeing Jordan's choice, Lee buys a ticket. What will be the equilibrium outcome?
A. Both Jordan and Lee will buy a ticket to the documentary. B. Both Jordan and Lee will buy a ticket to the comedy. C. Jordan will buy a ticket to the documentary and Lee will buy a ticket to the comedy. D. Jordan will buy a ticket to the comedy and Lee will buy a ticket to the documentary.
The efficient level of public good provision is determined
a. where the market demand curve intersects the marginal cost curve b. where the sum of individual valuations equals the sum of marginal costs c. without regard to economic factors d. where marginal revenue product equals marginal factor cost e. at the minimum point of the average total cost curve
One way to attain a faster rate of economic growth would be to shift some resources from the production of _________ goods to the production of __________ goods.
Fill in the blank(s) with the appropriate word(s).
The Russian wheat crop fails, driving up wheat prices in the U.S. This is an example of:
A. idiosyncratic risk. B. quantifiable risk. C. diversification. D. systematic risk.