The law of comparative advantage implies that a nation, individual, or region should trade for those economic goods for which it
What will be an ideal response?
is high opportunity cost producer.
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In its original form, the Phillips curve depicted a situation in which an economy could reduce its unemployment rate by holding the inflation rate steady
a. True b. False Indicate whether the statement is true or false
The 1890 Sherman Act was legislated by the:
A. Food and Drug Administration (FDA). B. Securities and Exchange Board (SEC). C. Federal Trade Commission (FTC). D. Environment Protection Agency (EPA).
The Mass Rapid Transit (MRT) System in Hong Kong has been running significant losses. Transport Ministry officials have argued over whether to raise fares to combat the losses
One argument against a fare increase is that it will aggravate traffic congestion on the streets during peak commuter hours. Suppose that the current fare is $4 and the government is considering raising it to $6. Officials estimate that this reduces the number of rides purchased from 10,000 to 8,000 per day. a. Using the midpoint formula, what is the estimated elasticity of demand for MRT rides? b. What does this elasticity of demand suggest to you about what will happen to total revenue earned by the transit system if the fare increase happens? c. Last year, the MRT system incurred a loss of $50,000 per day. Do you think the fare increase will resolve the deficit problem as well as Ministry officials anticipate? Explain.
The "law of demand" implies that
A. as prices rise, quantity demanded increases. B. as prices rise, demand increases. C. as prices fall, quantity demanded increases. D. as prices fall, demand increases.