Suppose the domestic price (without international trade) of wheat is $3.50 per bushel in the United States while the world price is $4.00 per bushel. Assuming the small-country model is applicable and no transportation costs, the United States will
A. have a domestic shortage of wheat.
B. neither export nor import wheat.
C. export wheat.
D. import wheat.
Answer: C
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Governments of market-oriented economies never tamper with the price mechanism.
Answer the following statement true (T) or false (F)
A merger between two firms occurs when
a. two firms agree to work temporarily on a single project, which is why we constantly read about mergers occurring and splitting up b. one firm splits into two or more firms, such as General Motors splitting into divisions of Buick, Pontiac, and so on c. each of the two firms agrees not to sell in each other's markets d. the two firms become one firm, as in the newspaper industry when the Chicago Sun and the Chicago Times became the Chicago Sun-Times e. one firm quits the industry and another takes over its market share
The Army Corps of Engineers has been accused of acting on the basis of a so-called "edifice complex."
a. True b. False Indicate whether the statement is true or false
At any fixed interest rate, an increase in time, n, until a payment is made:
A. affects only the future value. B. reduces the present value. C. has no impact on the present value since the interest rate is fixed. D. increases the present value.