In high-inflation countries, workers prefer to spend their income faster compared to low-inflation countries
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose a monopoly can sell 10 units of output for $21. In order to sell 11 units of output, the price must fall to $20. What is the marginal revenue of the 11th unit?
A) $41 B) $20 C) $10 D) $1 E) $220
Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?
GDP equals hours of work multiplied by output per hour. This can be rewritten as
A. growth rate of potential GDP = growth rate of labor input + growth rate of labor productivity. B. potential GDP = wages + cost of production. C. growth rate of real GDP = growth rate of labor input + growth rate of marginal output. D. growth rate of GDP = growth rate of wages + growth rate of labor productivity.
According to the substitution effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:
A. purchase more complementary goods. B. purchase more substitute goods. C. purchase fewer substitute goods. D. have more real income.