Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes. Which of the following groups would be worse off if these countries specialize and trade?
A. All groups are better off when specialization and trade take place.
B. Brazilian coffee producers.
C. Mexican tomato producers.
D. Mexican coffee producers.
Answer: D
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"When the cost of producing a unit of a good falls as its output rate increases" is the definition of
A) economies of scope. B) economies of scale. C) economic efficiency. D) technological efficiency.
Inheritance taxes tend to increase income inequality in the long run.
Answer the following statement true (T) or false (F)
An advocate of supply-side fiscal policy would advocate which of the following?
A. imposition of new taxes on technological advances B. more regulation C. increase in resource prices D. reduction in taxes
Suppose that in October the price of a cup of cafe latte was $2.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 300 lattes were consumed. What might have caused this change?
A. The price of tea (a substitute for cafe lattes) fell. B. The price of tea (a substitute for cafe lattes) rose. C. The price of coffee beans (an input of production of cafe lattes) rose. D. The price of coffee beans (an input of production of cafe lattes) fell.