A country that wants to create the highest level of economic integration would enter into a(n) Multiple Choice common market. free trade area. economic union. political union. customs union.
A. common market.
B. free trade area.
C. economic union.
D. political union.
E. customs union.
Answer: D. political union.
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What is the endowment effect?
A) the tendency of firms to use celebrities endowed with good looks to promote their products B) the phenomenon that economic agents are endowed with different qualities and abilities so that trade among individuals increase efficiency C) the tendency of people to be unwilling to sell something they already own even if they are offered a price that is greater than the price they would be willing to pay to buy the good if they didn't already own it. D) the tendency for economic agents with abundant resources to consume a proportionately greater quantity of goods and services
If Shawn can produce donuts at a lower opportunity cost than Sue, then
a. Shawn has a comparative advantage in the production of donuts. b. Sue has a comparative advantage in the production of donuts. c. Shawn should not produce donuts. d. Shawn is capable of producing more donuts than Sue in a given amount of time.
Which statement about oligopoly is false?
A. Prices in oligopoly are predicted to fluctuate widely and frequently. B. There is no single predicted pattern of action and reaction for oligopolists because one firm's behavior is a function of what its rivals do. C. Oligopolistic firms recognize their interdependence. D. A few firms play an important role in the sale of an identical or differentiated product.
(Last Word) It is expected that by 2050, most nations will have decreasing populations. With the likely decline in the labor force and number of hours of work in the economy, what must occur for real GDP to continue to rise?
A. Increasing amounts of natural resources must be brought into production. B. Labor productivity must grow faster than the drop in work hours. C. Consumption spending must grow faster than the drop in work hours. D. Government spending and tax policy must be altered to stimulate sufficient demand.