Suppose that in the absence of trade, the U.S. price for peas was lower than the world price for peas. Would allowing international trade mean that the United States would import or export peas? Who in the United States would benefit and who would lose with a free trade policy, and would the gains be greater than the losses?
The United States would export peas as producers increased output to take advantage of the higher world price. The U.S. price would rise to meet the world price, and U.S. producers would gain, while U.S. consumers would lose. The gains to producers would, however, outweigh the losses to consumers.
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Except for perfect complements, an indifference curve has a ________ slope and becomes ________ moving to the right
A) negative; flatter B) negative; steeper C) positive; flatter D) positive; steeper
The principal lender-savers are
A) governments. B) businesses. C) households. D) foreigners.
An increase in aggregate supply will cause the price level to:
a. rise and GDP to rise b. rise and GDP to fall. c. rise and the unemployment rate to fall. d. fall and GDP to rise. e. fall and the unemployment rate to rise.
A consumer chooses an optimal consumption point where the
a. marginal rate of substitution is maximized. b. rate at which the consumer is willing to trade one good for another equals the price ratio. c. price ratio is minimized. d. All of the above are correct.