Indian exporters are concerned about trade diversion because _________ made an agreement with the ASEAN free-trade area.
a. India
b. China
c. the United States
d. Mexico
Ans: b. China
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A firm that successfully differentiates its product or lowers its average cost of production creates
A) a perfectly inelastic demand curve for its product. B) value for its customers. C) entry barriers into its market. D) economies of scale.
Sadie works at a factory for $15 an hour and typically works 40 hours a week. Sadie gets a pay raise and now earns $20 an hour. She decides to work 45 hours a week at $20 an hour. Her response:
A. tells us the price effect outweighed the income effect of her pay raise. B. implies her labor-supply curve is upward sloping. C. is typically what is observed. D. All of these statements are true.
Which of the following statements is FALSE?
A. Private transfer payments, such as an inheritance, are included in the Gross Domestic Product (GDP). B. If statisticians counted intermediate goods, the estimate of Gross Domestic Product (GDP) would be too high. C. Transfers of used goods are not included in Gross Domestic Product (GDP). D. Gross Domestic Product (GDP) measures the market value of final goods and services produced during a particular time period.
All of the following are reasons why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services except
A) unions are successful in pushing up wages. B) firms are often slow to adjust wages. C) contracts make prices and wages sticky. D) menu costs make some prices sticky.