Explain the three distinct notions of openness
What will be an ideal response?
There are three notions of openness. First, there is openness in the goods market where agents buy domestic and foreign goods and domestic firms sell goods abroad. Second, there is openness in financial markets where individuals can purchase, for example, domestic or foreign bonds. And third, there is openness in factor markets where firms can locate either domestically or in other countries. Workers can also move between countries.
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________ is a situation in which a good or service is produced at the lowest possible cost
A) Equity B) Allocative efficiency C) Productive efficiency D) Optimal marginalism
If the demand curve for a product is vertical, any tax increase on the product is paid for entirely by the consumer
Indicate whether the statement is true or false
A firm’s budget line shows a given expenditure on production, given the input prices for the production process.
Answer the following statement true (T) or false (F)
Which statement is true?
A. Perfect price discrimination is very common. B. Perfect price discrimination would eliminate consumer surplus. C. Charging different prices to senior citizens, children, and adults under 65 is an example of perfect price discrimination. D. None of the statements are true.