The factor-price equalization theorem tells us that free trade between two countries should result in
A. all workers in the two countries having the same skill level.
B. all workers in the two countries earning the same wage rate.
C. all workers of the same skill level earning the same wage rate in the two countries.
D. all input prices being equal within each country.
Answer: C
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Suppose a bank has total assets of $3,000,000,000, of which $1,000,000,000 are cash assets and government securities with a "risk weight" of 0% and $2,000,000,000 are loans with a risk weight of 50%
The bank has total deposits and other liabilities of $2,800,000,000. The bank's risk-based capital ratio is A) 6.7%. B) 20.0%. C) 33.3%. D) 50%.
A guarded barbed wire fence separates East and West Bovinia. Soccer players are paid twice as much in West Bovinia as in East Bovinia. This is an example of
a. inelastic supply b. a temporary resource price differential c. a permanent resource price differential d. diminishing marginal revenue product e. economic rent
Differentiate between a public good and a common resource good
Suppose a company trying to increase profits, markets its laptops at a price that is higher than the equilibrium price of laptops in the market. Which of the following is likely to happen as a consequence?
a. The equilibrium price of laptops will increase to the level charged by this brand. b. There will be an excess supply of this particular brand of laptops in the market. c. There will be an excess demand for this particular brand of laptops in the market. d. The equilibrium price of laptops will decrease.