Answer the following statement(s) true (T) or false (F)
1. A country will gain from international trade whenever the world relative price differs from the autarkic relative price.
2. Large countries have more to gain from international trade than small countries do.
3. A perfectly competitive firm is one that can sell any quantity that it wants at any price it wants.
4. A competitive firm faces a downward-sloping demand for its product.
5. For a competitive firm, marginal revenue is constant and equal to the market price.
1. True
2. False
3. False
4. False
5. True
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Specialization and exchange develop under conditions of
A) massive ignorance. B) a total conflict of interests. C) coercion and exploitation. D) none of the above.
Refer to Figure 4-15. As a result of the tax, is there a loss in consumer surplus?
A) No, because the producer pays the tax. B) No, because the market reaches a new equilibrium C) No, because consumers are charged a lower price to cover their tax burden. D) Yes, because consumers pay a price above the economically efficient price.
In the 1980s, banks __________ the amount of highly speculative loans they were holding due to __________ deposit rates
A) increased; rising B) increased; falling C) decreasing; rising D) decreased; falling
Which of these is the most ideal measure of aggregate output?
a. Disposable income b. Nominal GDP c. Personal income d. The real GDP e. Gross national product