If countries have similar factor endowments and productivities, what type of trade are they most likely to have?
What will be an ideal response?
Intraindustry
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Which of the following is a prominent solution to adverse selection in used-car markets?
A) An imposition of a tax on the sale of each unit in the used-car market B) The imposition of a price ceiling in the used-car market C) The imposition of a price floor in the used-car market D) Third-party certification of used cars
Are credit cards "money"?
A) No, because they are not used as a general medium of exchange. B) No, because they are used to make money. C) Yes, because they are used as a general medium of exchange. D) Yes, because they are used to make money.
The text maintains that competition exists in government
What will be an ideal response?
Sara looks into her closet and discovers a pair of like-new shoes she no longer wears because they are out of fashion. From the economist's perspective, was Sara behaving rationally when she bought those shoes?
A) No. If any of a person's decisions have poor results, that person is irrational. B) Yes, Sara didn't buy those shoes when they were out of fashion. C) No. The rationality assumption states that rational people never make mistakes. D) It's not clear because psychology, not economics, deals with the rationality assumption.