Suppose that antitrust laws were successful in moving the allocation of resources in the computer software industry closer to the social optimum. This situation would illustrate which of the following Ten Principles of Economics?
a. Trade can make everyone better off.
b. The cost of something is what you give up to get it.
c. Governments can sometimes improve market outcomes.
d. A country's standard of living depends on its ability to produce goods and services.
c
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A subsidy is a negative tax
Indicate whether the statement is true or false
Which of the following is an assertion of the Heckscher-Ohlin model?
A) The wage-rental ratio is determined by relative product prices. B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good. C) In the long-run, labor is mobile and capital is not. D) Factor price equalization will occur only if there is costless mobility of all factors across borders. E) Factor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.
The law of demand states that the quantity demanded of a good and
a. the price of a substitute are positively related b. its price are inversely related c. its price are positively related if it is an inferior good d. the wealth of buyers are positively related e. its price are inversely related if it is a normal good
A decrease in interest rates caused by a change in the price level would cause a(n) ________.
A. increase (or shift right) in aggregate demand B. decrease in the quantity of real output demanded (or movement up along AD) C. increase in the quantity of real output demanded (or movement down along AD) D. decrease (or shift left) in aggregate demand