Which of the following can an economist predict with the most accuracy?
a. how Gwen will respond to an increase in the price of down jackets
b. how Larry, Terry, and Mateo will respond to a decrease in the price of orange juice
c. how a group of ten will respond to an increase in the price of motorcycles
d. how a group of 100 will respond to a decrease in the price of cell phones
d. how a group of 100 will respond to a decrease in the price of cell phones
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All of the following are keys to economic development EXCEPT
A) establishment of a system of property rights. B) minimizing "creative destruction." C) open economies. D) an educated workforce.
The use of commodity money
a. has a high opportunity cost. b. does not provide an adequate unit of account. c. creates a mutual coincidence of wants problem. d. creates inflation. e. All of the above.
Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and drink is relatively labor-intensive. If the countries engage in free trade, the price of food will
A. fall in Alpha and rise in Beta. B. fall in both countries. C. rise in both countries. D. rise in Alpha and fall in Beta.
Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does NOT change the oil himself?
A. The opportunity cost of changing oil is higher for Tiger Woods than for the garage mechanic. B. Tiger Woods has an absolute advantage in changing oil. C. There is no opportunity cost for the garage mechanic to change oil. D. Tiger Woods has a comparative advantage in changing oil.