In the run up to the war in Iraq that began in 2003, one of the many concerns raised was that a war could result in a decrease in the supply of oil. At the same time, the U.S
economy was having a hard time recovering from the recession of 2001 and, as a result, incomes of many consumers had decreased (due to layoffs, wage cuts, and so forth). All else constant, it was reasonable to predict, with certainty, that the combination of these two factors would cause the equilibrium: A) quantity of oil to decrease.
B) quantity of oil to increase.
C) price of oil to increase.
D) price of oil to decrease.
A
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Refer to Scenario 2. If the age of a house is 25 years with 1,500 square feet, what is the estimated market value of the house?
What will be an ideal response?
Juanita, a lawyer, can type faster than Jill, her secretary. Jill, on the other hand, does not have the ability or skills to practice law. Applying the principles of international trade to this situation, an economic consultant advises Juanita to
a. fire Jill, practice law and do the typing because she's better at both b. practice law and leave all the typing to Jill c. divide her time equally between typing and practicing law d. quit law and concentrate on typing because that's her comparative advantage e. quit law and concentrate on typing because that's her absolute advantage
Classical economists believe that:
A. velocity is not constant. B. changes in the money supply affect real GDP. C. the quantity of money explains prices. D. the money supply affects velocity.
In a monopolistically competitive industry, good product substitutes are available whereas in a monopoly they are not available.
Answer the following statement true (T) or false (F)