"Because the United States is the largest economy in the world and can produce anything it needs domestically, there are no gains from trade for the United States." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is incorrect. The United States, like any other nation, gains from trade when it specializes according to comparative advantage.
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Assume that when the price of good X is $7, quantity demanded is 25. When price is increased to $9, quantity demanded falls to 20. Based on this information, over the range in question demand is elastic
Indicate whether the statement is true or false
If a supply curve is horizontal, then supply is said to be perfectly elastic, and the price elasticity of supply approaches infinity
a. True b. False Indicate whether the statement is true or false
A movement along the demand curve might be caused by a change in
a. income. b. the prices of substitutes or complements. c. expectations about future prices. d. the price of the good or service that is being demanded.
For a construction company that builds houses, which of the following costs would be a fixed cost?
a. the $20 per hour wage paid to a construction foreman b. the $30,000 per year salary paid to the company's bookkeeper c. the $2 per worker-hour paid to the state government for workers' compensation insurance d. All of the above are correct.