If the relative market price of producing cotton is more than the opportunity cost of producing it in the South,
(a) the market price of cotton will fall in the long run.
(b) producers will increase the supply of cotton in the long run.
(c) resources will flow away from the production of cotton, causing the supply of it to decline with the passage of time.
(d) the situation will remain unchanged as long as supply and demand remain in balance.
(b)
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Some economists develop theories concerning policy issues to
A. further their own political agendas. B. understand what happened in an earlier time period. C. describe current economic events. D. make sound recommendations about policy alternatives. E. help elect new government officials.
The specialty of Lloyd's of London is
A) annuities. B) hedge funds. C) mutual funds. D) reinsurance.
The political attractiveness of tariffs, quotas, and other trade restrictions is primarily the result of
What will be an ideal response?
With respect to the market clearing price and the equilibrium quantity of good B, increases in the demand for and the supply of good B will definitely
A) increase the market clearing price of good X but have an uncertain impact on the equilibrium quantity of B. B) reduce the market clearing price and the equilibrium quantity of good B. C) increase the market clearing price and the equilibrium quantity of good B. D) increase the equilibrium quantity of good X but have an uncertain impact on the market clearing price of B.