Mexico has a comparative advantage in producing corn
A. if its opportunity cost of producing corn is lower than the opportunity cost in other countries.
B. if its opportunity cost of producing corn is the same as the opportunity cost in other countries.
C. regardless of the opportunity cost in other countries.
D. if its opportunity cost of producing corn is higher than the opportunity cost in other countries.
Answer: A
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The variable G considered in the model encompasses
A) government expenses on goods. B) government expenses on goods and services. C) government expenses on goods and services as well as transfers. D) government expenses on goods and services as well as transfers and public debt service.
Suppose that a perfectly competitive market is in equilibrium. Then,
a. the equilibrium quantity provides the maximum possible benefit to buyers b. the equilibrium quantity provides the maximum possible benefit to buyers and sellers combined c. total (producer + consumer) surplus is equal to price x quantity. d. an additional unit, if produced, would produce a benefit that exceeds its cost of production e. an additional unit could be produced at a cost to some producer that is less than the benefit to some consumer
The quantity theory of money implies that an increase in the money supply will ultimately:
A. affect only the level of real GDP; the price level will remain unchanged. B. increase the price level and leave real GDP unchanged. C. increase the price level and the level of real GDP. D. decrease the price level and the level of real GDP.
Headline inflation is:
A. used only by the media for discussing inflation. B. limited measure of inflation in the economy. C. core inflation with the prices of food and gasoline added in. D. not a generally accepted measure of inflation.