Why would umbrellas be produced in an arid country whose residents have no demand for such clothing product?
What will be an ideal response?
POSSIBLE RESPONSE: For this arid country, any umbrella production must be exported, so its domestic supply curve is also its export supply curve. It will produce and export umbrellas if it has some local production whose marginal cost is lower than the no-trade price in the rest of the world.
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Under current WTO rules, a country can adopt
A) any environmental standard it chooses, even if it discriminates against foreign producers. B) only the same environmental standards as its immediate geographic neighbors. C) any environmental standard it chooses as long as it does not discriminate against foreign producers. D) only WTO-approved environmental standards.
Define frictional unemployment, structural unemployment, and cyclical unemployment. Give examples of each type of unemployment
What will be an ideal response?
A man-made resource such as a building or a machine is an example of which resource?
A) entrepreneurial ability B) labor C) physical capital D) human capital
Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs. The restaurant earns $1.3 million in revenues and has $5 million in net worth. Based on this information, what is the economic profit for Laura's Pizza Place?
A) $200,000 B) $400,000 C) $500,000 D) $2.8 million