If Canada can produce 500 TV sets at the cost of 10 cars, while Mexico can produce 1,000 TV sets at the cost of 8 cars, we know the following:
a. Canada has a comparative advantage in TV production.
b. Mexico has the absolute advantage in TV production.
c. The two countries' joint output equals 1,500 TV sets and 18 cars without trade, but it will be higher after proper specialization and trade.
d. Canada has a comparative advantage in car production.
e. Canada produces more cars than Mexico does.
D
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Which of the following best illustrates the fallacy of composition?
a. If Jamal had more money, he could afford to buy more goods. b. If Aisha stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game. c. If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise. d. High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing.
According to the open-economy macroeconomic model, if the United States moved from a government budget deficit to a government budget surplus, U.S. real interest rates would increase and the real exchange rate of the U.S. dollar would appreciate
a. True b. False Indicate whether the statement is true or false
All of the following will decrease the demand for labor by firms in an industry except
A. a decrease in the prices of inputs that complement labor. B. a decrease in the demand for the product produced by the industry. C. a decrease in the price of the product produced by the industry. D. a decrease in the prices of inputs that substitute for labor.
A good that has social costs that are less than private costs has a quantity that is
A. too high. B. equal to zero. C. just right. D. too low.