Voluntary exchanges generate:
A. surplus, leaving both participants better off than they were before.
B. deadweight loss, leaving both participants worse off than they were before.
C. deadweight loss, leaving at least one participant worse off than they were before.
D. a transfer of surplus from one participant to another.
A. surplus, leaving both participants better off than they were before.
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Why is trade based on comparative advantage?
What will be an ideal response?
If the demand curve is horizontal, then demand is:
A. perfectly elastic. B. perfectly inelastic. C. unit elastic. D. elastic.
The Gini ratio of income inequality ranges between:
A. 0 and 10,000. B. 1 and 10. C. 1 and +1. D. 0 and 1.
To calculate the internal rate of return on a factory that would yield a perpetual future stream of income, one would divide
A) the annual future payment by the cost of the factory. B) the sum of the future payments by the cost of the factory. C) the cost of the factory by the rate of interest. D) the cost of the factory by the annual future payment.