The net benefits that a nation receives from trade are called its gains from trade.
a. true
b. false
Ans: a. true
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Suppose that there are 10 firms in an industry, each accounting for 10 percent of industry sales. Two of these firms decide to merge. Which of the following statements about the impact of this merger is (are) INCORRECT?
A) The merger causes the four-firm concentration ratio to increase from 40 to 50. B) The merger causes the HHI to increase by 100. C) The merger will not change the HHI unless the industry's sales increase. D) Both answers A and C are incorrect.
Refer to the graphs shown, which depict a perfectly competitive market and firm in a constant-cost industry. If market demand decreases from D0 to D1, in the long run:
A. some firms will exit this market and the price will return to P0. B. new firms will enter this market and the price will remain at P1. C. new firms will enter this market and the price will return to P0. D. some firms will exit this market and the price will remain at P1.
If the minimum wage is set above the market clearing wage, wages will be "sticky" in the downward direction.
Answer the following statement true (T) or false (F)
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.