A French worker can produce either 4 barrels of wine or 16 shirts a week; and Italian worker can produce either 10 barrels of wine or 20 shirts a week.
A. After the countries begin to trade, one barrel of wine will cost between four and eight shirts.
B. France has an absolute advantage in both wine and shirts.
C. France will export shirts and import wine.
D. France has an absolute advantage in making shirts.
C. France will export shirts and import wine.
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Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the
a. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year. c. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. d. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year.
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The problems of externalities and poorly formed property rights are:
A. better solved by private rather than government action. B. the only two legitimate reasons for creating government. C. among several rationales for the existence of government. D. minor in modern economies.
Suppose one U.S. dollar can purchase a half pound of strawberries in the United States. After converting dollar to pesos, one U.S. dollar can now purchase a full pound of strawberries in Mexico. These values represent:
a) a real exchange rate. b) a nominal exchange rate. c) a purchasing power parity rate. d) a transaction rate.