Farm programs such as those of the United States and the European Union cause a misallocation of international agricultural resources primarily because:
A. they distort domestic and world agricultural prices.
B. they inhibit technological progress in agriculture.
C. production and trade occur on the basis of comparative advantage.
D. price supports are set below market-clearing levels.
Answer: A
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In the above figure, the most efficient way to produce 15 units is to hire
A) 2 workers. B) 3 workers. C) 4 workers. D) 5 workers.
If net exports are positive
A) net foreign investment is also positive. B) net foreign investment is negative. C) capital inflows must be greater than capital outflows. D) Both A and B are correct.
Which of the following is used by lenders to reduce the problems that arise from asymmetries of information?
A) patent contracts B) collateral C) decreased interest rates D) restrictive contents
Suppliers recognize there is a shortage in the market for their product when they notice that
a. the quantity supplied exceeds the quantity demanded. b. the quantity demanded is falling. c. inventories are falling. d. production exceeds new orders for the product. e. government economists announce a shortage exists.