The people who support restricted international trade say that ______
A. protection saves jobs, in both the U.S. and foreign economies
B. U.S. firms won't be able to compete with low-wage foreign labor if trade is free
C. outsourcing sends jobs abroad, which brings diversification and makes our economy more stable
D. protection is needed to enable U.S. firms to produce the things at which they have a comparative advantage
B This commonly encountered argument is flawed, because U.S. firms can compete when U.S. productivity is high.
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As macroeconomic conditions improve and consumers' incomes and wealth increase, their demand for many products tends to become ________ price inelastic. As such, the ability of firms to mark up price above cost will ________
A) more; increase B) more; decrease C) less; increase D) less; decrease
Which of the following is not a correct statement about individual and group preferences?
a. Individuals have preferences b. Groups have preferences c. Individuals within groups have preferences d. Groups make collective decisions on behalf of their members
The interest rate is determined by the
a. altruism or greed of bankers. b. demand for loanable funds. c. supply for loanable funds. d. supply and demand for loanable funds.
Which statement is false?
A. Rent is an excellent means of efficiently allocating the use of scarce land. B. There is a very strong current in economic thought that denies the landlord's claim to rent. C. "The land shall not be sold forever" is a biblical admonition with which some people still agree. D. None of the statements is false.