A fall in prices of imported resources will cause aggregate:
a. Demand to increase
b. Demand to decrease
c. Supply to decrease
d. Supply to increase
d. Supply to increase
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Use the following graph showing short-run cost curves for a perfectly competitive firm to answer the next question.
At what price would the firm earn a normal profit and break even?
A. P1 B. P2 C. P3 D. P4
When a nation exports a good or service, the nation's consumer surplus ________, its producer surplus ________, and its total surplus ________
A) increases; decreases; increases B) increases; decreases; decreases C) increases; increases; increases D) decreases; decreases; decreases E) decreases; increases; increases
Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of
A) moral hazard. B) adverse selection. C) asymmetric information. D) the free-rider problem.
Which of the following would be an indication that a nation has a balance of payments deficit?
A. It is buying gold abroad B. Its imports exceed its exports C. Its holdings of official reserves are declining D. It is borrowing abroad to finance capital investments