This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.
According to the graph shown, when this economy is open to free trade without restriction, the amount imported is:
A. 900.
B. 1250.
C. 1000.
D. 650.
Answer: B
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Option A provides $9,000 with probability 50 percent or $11,000 with probability 50 percent. Option B provides $8,000 with probability 50 percent or $12,000 with probability 50 percent. For most people the cost of risk associated with B is
A) less than that associated with A. B) the same as that associated with A. C) exactly twice that associated with A. D) more than twice that associated with A.
Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concept of absolute advantage, which of the following statements is true? The United States:
A. has the absolute advantage in the production of both gloves and radishes. B. does not have the absolute advantage in the production of either gloves or radishes. C. has the absolute advantage in the production of gloves, but not radishes. D. has the absolute advantage in the production of radishes, but not gloves.
The market-day supply curve is
a. horizontal, reflecting the fact that the quantity supplied can increase infinitely b. vertical, reflecting the fact that the quantity supplied cannot change c. increasing, reflecting the positive relationship between price and quantity d. decreasing, reflecting the inverse relationship between price and quantity e. flatter than the market demand curve
A consumer who has chosen the right mix of goods and services to maximize his or her utility is said to have achieved
A. consumer optimum. B. consumer surplus. C. consumer benefit. D. consumer equilibrium.