Suppose country X can produce a personal computer at an opportunity cost of 1000 t-shirts. Assume that country X has a comparative advantage in the production of t-shirts
Would country X ever agree to terms of trade with country Y such that one personal computer would be exchanged for 1100 t-shirts?
There would be no reason for country X to agree to such terms of trade. If country X can already produce one personal computer at an opportunity cost of 1000 t-shirts why would it agree with country Y to purchase a computer for 10% higher? The answer is it would not.
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It is possible for the United States to compete against cheap foreign labor because expensive domestic workers
A) pay U.S. taxes. B) receive subsidies. C) are more productive. D) belong to unions.
Sanjiv is a keyboard player in a progressive metal band. His band offers fans three types of merchandise with the band’s logo: buttons, stickers, and T-shirts. The band charges $20 for a T-shirt but offers buttons and stickers for free. How does marginal utility explain this decision?
a. The marginal utility of the buttons and stickers declines as fans take more, whereas the marginal utility of the T-shirts increases as fans buy more. b. The marginal utility of an additional sticker or button is very low compared to the marginal utility of an additional T-shirt. c. The marginal utility per dollar of the buttons and stickers is much higher than the marginal utility per dollar of the T-shirts. d. It is easier for fans to reach consumer equilibrium by taking additional buttons and stickers than it is when buying additional T-shirts.
The price elasticity of demand for senior citizens purchasing coffee from McDonald's is ?5, while non-senior citizens have a price elasticity of demand equal to ?1.25. If it costs McDonald's $0.02 to produce a coffee, the optimal price for a cup of coffee for senior citizens and the resultant marginal cost under third-degree price discrimination are, respectively:
A. $0.025 and $0.02. B. $0.02 and $0.80. C. $0.016 and $0.20. D. $0.10 and $0.02.
Define the term "import."
What will be an ideal response?