When an American college student in Davis, California spends $200 on a pair of Louis Vuitton jeans (a famous French brand), U.S. consumption ________, U.S. net exports ________, and U.S. GDP ________
A) does not change; increases by $200; increases by $200
B) increases by $200; decreases by $200; does not change
C) increases by $200; does not change; increases by $200
D) does not change; does not change; does not change
E) does not change; decreases by $200; decreases by $200
B
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A perfectly competitive firm produces 3,000 units of a good at a total cost of $36,000. The fixed cost of production is $20,000. The price of each good is $10. Should the firm continue to produce in the short run?
A) Yes, it should continue to produce because its price exceeds its average fixed cost. B) No, it should shut down because it is making a loss. C) Yes, it should continue to produce because it is minimizing its loss. D) There is insufficient information to answer the question.
Consider the production possibilities frontier in the figure shown. As more and more cigars are produced the opportunity cost of producing more cigars:
A. decreases.
B. stays the same.
C. increases.
D. decreases then increases.
What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly
Proponents of requiring the government to balance its budget argue that debt burdens future generations. Explain one claim they make to support this argument