Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include
a. both the increased inventory of sugar and the increased inventory of energy drinks.
b. the increased inventory of sugar, but not the increased inventory of energy drinks.
c. the increased inventory of energy drinks, but not the increased inventory of sugar.
d. neither the increased inventory of sugar nor the increased inventory of energy drinks.
a
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Assume the marginal propensity to consume is 0.8. If consumer spending increases by $20 billion, then real GDP will
A. decrease by $100 billion. B. increase by $16 billion. C. increase by $100 billion. D. not change.
Karen, Tara, and Chelsea each buy ice cream and paperback novels to enjoy on hot summer days. Ice cream costs $5 per gallon, and paperback novels cost $8 each. Karen has a budget of $80, Tara has a budget of $60, and Chelsea has a budget of $40 to spend on ice cream and paperback novels. Who can afford to purchase 8 gallons of ice cream and 5 paperback novels?
a. Karen, Tara, and Chelsea b. Karen only c. Tara and Chelsea but not Karen d. none of the women
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the ________ advantage in the production of tablets, which means they should specialize in ________.
A. comparative; iPods B. absolute; tablets C. absolute; iPods D. comparative; tablets
Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year
If these two states were to engage in trade, which of the following is TRUE? A) Missouri would specialize in pear production and trade pears to Washington pecans. B) Missouri would specialize in pecan production and trade pecans to Washington for pears. C) Washington would produce both pears and pecans and Missouri would produce neither. D) Half of both Washington's and Missouri's resources would be devoted to pears and the other half to pecans because that is the comparative advantage.