"Mediocre economists often consider only the immediate direct effects of a change, whereas a good economist will also consider indirect effects that may only become observable over time." This statement most clearly emphasizes
a. the law of comparative advantage.
b. the importance of secondary effects.
c. the gains derived from voluntary exchange.
d. economizing behavior.
b. the importance of secondary effects.
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Over the past 70 years, which of the following has occurred?
i. The service sector has grown so that now about 80 percent of workers are now employed in the service industry. ii. The manufacturing sector has shrunk, so now about 20 percent of workers are now employed in the production of goods. iii. The percentage of workers employed in the service industry has increased steadily. A) i, ii and iii B) i and iii C) ii only D) i only E) ii and iii
Refer to Figure 3-4. At a price of $25, how many units will be supplied?
A) 400 B) 500 C) 600 D) 800
Scarcity is a concept that does not apply to
A. human wants. B. natural resources. C. land. D. machinery.
The purchasing power parity theory is not a good explanation of how nominal exchange rates are determined in the short run because:
A. there is no evidence that low inflation is associated with less rapid nominal exchange rate depreciation. B. most nominal exchange rates are fixed and foreign exchange markets do not bring the supply and demand for currencies into equilibrium. C. many goods and services are not traded internationally and not all internationally-traded goods are standardized. D. most goods and services are traded internationally and are standardized.