If two countries participate in free trade:
A) every individual in each country will benefit.
B) both countries as a whole may gain from the trade.
C) one country will benefit, but the other country will experience reduced welfare..
D) neither country will benefit.
Ans: B) both countries as a whole may gain from the trade.
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JoAnn considers cola and plain sparkling water to be good substitutes. Suppose the price of sugar, a key ingredient used to produce cola, falls. According to the income effect, which of the following is most likely to occur?
a. JoAnn will purchase less cola and more sparkling water. b. JoAnn will purchase more cola and less sparkling water. c. JoAnn will purchase more of most goods due to her higher real income. d. JoAnn's demand curve will decrease (shift in), causing her to purchase less cola.
An economic system characterized by private ownership of the factors of production and economic activity coordinated through a system of markets and prices is called:
a. capitalism. b. socialism. c. communism. d. none of these.
When a monopolist maximizes profit, its marginal cost will
a. be less than its average fixed cost. b. be less than the price per unit of its product. c. exceed its marginal revenue. d. equal its average total cost.
Consider the following payoff matrix facing Harry and Sally when each chooses to go to the coffee shop listed. Both Harry and Sally would like to meet each other but are shy about asking the other out on a date. Harry StarbucksDunkin DonutsSally StarbucksH: 1, S: 1H: 0, S: 0 Dunkin DonutsH: 0, S: 0H: 1, S: 1What is Harry's best strategy?
A. Harry has no best strategy. B. Stay at home. C. Go to Starbucks. D. Go to Dunkin' Donuts.