Refer to Table 2-14. If the two countries specialize and trade, who should export guitars?
A) They should both be exporting guitars.
B) Ireland
C) There is no basis for trade between the two countries.
D) Scotland
B
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What does the Law of Diminishing Marginal Product state?
What will be an ideal response?
For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced, what must be done?
A) The size of marginal external benefit must be accurately determined. B) The government must produce the product. C) Private production and private consumption must both be directly subsidized. D) The quantity demanded must be decreased to the efficient amount. E) Private production without the subsidy must be prohibited.
In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the Fed
A) sold $250 in government bonds. B) sold $100 in government bonds. C) sold $50 in government bonds. D) purchased $100 in government bonds.
For a monopolist, marginal revenue is lower than price
a. True. b. False.