The inclusion of external costs in the decision making process determining equilibrium price and quantity leads to
A) lower priced items and increased quantity.
B) lower priced items and a decline in quantity.
C) higher priced items and increased quantity.
D) higher priced items and a decline in quantity.
Answer: D
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When a good becomes more scarce, and the government prevents sellers from raising prices,
A) demanders are prevented from competing against one another to obtain the good. B) the opportunity cost to purchasers of obtaining the good will nonetheless rise as long as the quantity demanded is greater than the quantity supplied. C) the quantity purchased will be greater than the quantity supplied. D) there will be no rationing system to allocate the good among competing users.
Assume that an economy has 2000 workers, each working 4000 hours per year. If the average real output per worker-hour is $10, then total output or real GDP will be:
A. $20 million. B. $100 million. C. $80 million. D. $40 million.
Let's assume that cloth-making (labor-intensive) and farming (land-intensive) are the only two sectors of production in a country. If this country is labor-abundant, and if trade corresponds to the Heckscher-Ohlin theory, which of the following groups will gain in the short run, but lose in the long run, from the opening of trade?
A. Domestic landowners in the domestic cloth-making sector B. Foreign workers in the foreign cloth-making sector C. Foreign landowners in the foreign farming sector D. Domestic landowners in the domestic farming sector
Which of the following statements regarding openness of an economy and growth is TRUE?
What will be an ideal response?