If average labor productivity in two countries is the same, average living standards will be lower in the country with:
A. the smaller population.
B. the larger population.
C. the lower share of population employed.
D. the higher share of population employed
Answer: C
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If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?
What will be an ideal response?
Neither the demand nor the supply of gasoline is perfectly elastic or inelastic. When the government increases the federal tax on gasoline, the effect on buyers is that the price they pay
A) rises. B) falls. C) does not change. D) rises if the demand is inelastic and falls if the demand is elastic. E) rises if the supply is inelastic and falls if the supply is elastic.
Gasoline and bicycles are substitutes in consumption. Suppose we increase the federal gasoline tax to $1 per gallon
Initially, the gasoline price rises due to the tax, and the demand curve for bicycles shifts rightward because these goods are substitutes. Then, the bicycle price rises, and the demand curve for gasoline shifts rightward. Assuming the general equilibrium is achieved in both markets after these two steps, which of the following statements is NOT true? A) Partial equilibrium analysis only focuses in the first-round changes in the gasoline market (ignoring the secondary effects that arise from changes in the bicycle market). B) Partial equilibrium analysis would predict a larger shift in the price and quantity demanded for gasoline than a general equilibrium analysis. C) The price increase in gasoline is larger under the general equilibrium approach, but the change in the quantity of gasoline demanded is smaller than under partial equilibrium analysis. D) All of these statements are true.
If demand increases and supply decreases
A) the market clearing price definitely will increase, and the equilibrium quantity definitely will increase. B) the market clearing price definitely will increase, and the equilibrium quantity definitely will decrease. C) the market clearing price definitely will increase, but the change in the equilibrium quantity cannot be determined without more information. D) the equilibrium quantity definitely will decrease, but the change in the market clearing price cannot be determined without more information.