If trade between two countries is voluntary, one can expect that
A. one country’s gain is necessarily the other’s loss.
B. one country will exploit the other one.
C. neither country really gains from trade.
D. the larger country will always gain at the expense of the smaller.
E. both countries expect to gain something.
Answer: E
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When a country exports a good, the country's producer surplus ________, consumer surplus ________, and the country ________ from the trade
A) increases; increases; gains B) decreases; increases; gains C) increases; decreases; gains D) decreases; decreases; loses E) increases; decreases; loses
The price of domestic goods in terms of foreign goods is referred to as
A) the nominal exchange rate. B) the relative inflation rate. C) the real exchange rate. D) the current account balance.
Suppose that you have $100 today and expect to receive $100 one year from today. Your money market account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Suppose that you borrow $60 and spend $160 today. After you repay your loan one year from today, how much money will you have available for consumption one year from today?
a. $0 b. $25 c. $50 d. $75
If the price of an input increases, each individual firm's marginal cost curve shifts ________ and the industry supply curve ________.
A. up; does not change B. downward; shifts to the left C. up; shifts to the left D. downward; shifts to the right