Suppose that a consumer purchases just two goods, X and Y. The ratio of the price of good X to the price of good Y is the:
A. Intercept on the Y axis of the budget line
B. Intercept on the X axis of the budget line
C. Size of the shift in the budget line
D. Slope of the budget line
Answer: D
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To encourage economic development a country should do all of the following EXCEPT
A) establish a system of property rights. B) allow creative destruction to run its course. C) limit the amount of imports allowed into the country. D) invest in human capital.
Which of the following statements regarding the long-term equilibrium is TRUE?
A) As new firms enter a market, each existing firm increases the quantity it produces. B) Firms leave a market if they are making zero economic profit. C) Entry and exit stop when firms are making an economic profit. D) Entry and exit stop when firms make zero economic profit.
According to traditional Keynesians, monetary policy is ineffective in affecting the economy during a recession because
A) an increase in the money supply will have little impact on interest rates. B) an increase in the money supply will only lead to higher interest rates. C) an increase in the money supply will only lead to lower investment spending. D) an increase in the money supply will raise the amount of government debt.
Based on Table 4.1, according to the Heckscher-Ohlin Theorem, U.S. exports should be goods that
A) intensively use labor input. B) intensively use capital input. C) use capital and labor in about equal proportions. D) use either labor or capital input, depending on the good. E) Not enough information to tell.