Real income will rise from one year to the next if nominal income
A. rises and the price level rises faster.
B. falls and the price level falls faster.
C. falls faster than the price level.
D. falls and the price level rises.
Answer: B
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The Solow model suggests that economies with the same aggregate production function, ratio of workers to the total population and saving rates will ________
A) trade with one another B) start with different initial levels of per capita income C) possess the same rate of depreciation D) experience convergence
An example of a barrier to entry is
a. patent law b. government regulations c. cost of advertising d. economies of scale e. all of the above
Price ceilings and price floors
A) shift demand and supply curves and therefore have no effect upon the rationing function of prices. B) interfere with the rationing function of prices. C) make the rationing function of free markets more efficient. D) cause surpluses and shortages, respectively.
If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Tina has a comparative advantage in producing banana splits.
Answer the following statement true (T) or false (F)