If the United States were to adopt a policy of free trade with European countries and Japan, this policy would:
a. help the United States and hurt the other countries because the United States has a larger population.
b. help all of the countries involved because every country would have a comparative advantage in the production of some goods.
c. hurt all of the countries involved because all the countries are capable of producing anything that could be produced in one of the other countries.
d. help the United States and hurt the other countries because the United States has more natural resources than the other countries.
b
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Why is the demand curve for money downward sloping?
a. The opportunity cost of holding money is low when interest rates are steady. b. The opportunity cost of holding money is low when interest rates are high. c. The opportunity cost of holding money is high when interest rates are high. d. The opportunity cost of holding money is high when interest rates are steady.
Suppose the market for shoes consists of three consumers. The table below shows the quantity demanded at various prices for each consumer:Price PerPairPairs Demandedby PatPairs Demandedby LeighPairs Demandedby Chris$100010$75031$50173$302105What is the market demand for shoes when the price is $50 a pair?
A. It will depend on the quantity supplied when the price is $50 a pair. B. 11 pairs C. 7 pairs D. 15 pairs
The commodity substitution bias is that
A) consumers substitute high-quality goods for low-quality goods. B) government spending is a good substitute for investment expenditures. C) national saving and foreign borrowing are interchangeable. D) consumers decrease the quantity they buy of goods whose relative prices rise and increase the quantity of goods whose relative price falls.
If the marginal social benefit of a good equals the marginal private benefit of the good, then the marginal external benefit of the good
A) is zero. B) equals the marginal social benefit. C) equals the marginal social cost. D) equals the marginal private cost.