If the dollar rises in value compared to other currencies, what will happen in the United States?
a. an increase in aggregate demand
b. an increase in aggregate supply
c. a decrease in aggregate supply
d. an increase in the U.S. price level
b
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Using the figure above, demonstrate what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two countries
Which country will export cloth? What happens to the relative income of workers in Australia as a result of trade? Does it increase or decrease? Would land owners in Australia lobby for or against free trade? Would land owners in Australia lobby for or against free admittance of immigrant workers?
When shopping for a ticket to see One Direction, her favorite band, in concert, Annie mistakenly purchased a non-refundable ticket to the off-off-off Broadway play "One Dissection," which she has no interest in seeing. Because the ticket cost her $100, Annie decides to think about it:
A. rationally and skips the play and spends another $100 on the concert ticket. B. rationally and sits through the play she has the ticket for, which is as awful as she thought it might be. C. irrationally and skips the play and spends another $100 on the concert ticket. D. None of these is a possible outcome.
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce:
A. both goods, since they have an absolute advantage in both goods, and not trade. B. only shoes, since they have a comparative advantage in the production of shoes, and not trade. C. apples, since they have a comparative advantage in the production of apples, and not trade. D. only apples, since they have a comparative advantage in the production of apples, and trade for shoes.
A market that will naturally end up with just one seller is a(n)
a. evolutionary monopoly. b. natural monopoly. c. competitive monopoly. d. entry barrier monopoly.