Refer to Figure 9.4. If the government establishes a price floor of $40 and purchases the surplus, total consumer and producer surplus will be
A) $15.
B) 30 widgets.
C) $1,050.
D) $1,200.
E) $1,350
E
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Imports are defined as the goods and services that we
A) partially produce in both the United States and another country. B) produce and consume in the United States. C) produce abroad using U.S. owned factories and then consume in the United States. D) buy from other countries. E) sell to other countries.
If business losses are the result of uncertainty in the real world, then
A) business profits are too. B) profits must equal losses in the short run. C) profits must equal losses in the long run. D) losses could be eliminated if we could eliminate uncertainty in the real world, but profits will still remain.
If the slope of the relationship between savings and interest rates is 0.5, then
A) savings and interest rates have a positive relationship B) savings and interest rates have a negative relationship C) savings and interest rates have no relationship D) savings and interest rates have an inverse relationship
If a scale economy is the dominant technological factor defining or establishing comparative advantage, then the underlying facts explaining why a particular country dominates world markets in some product may be pure chance, or historical accident
Explain, and compare this with the answer you would give for the Heckscher-Ohlin model of comparative advantage.