If a country is a net importer of a good, the price of that good will ________ when the economy goes from closed to open for trade.
A. increase
B. stay the same
C. decrease
D. first increase then decrease
Answer: C
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If an allocation of resources is efficient, then
a. consumer surplus is maximized. b. producer surplus is maximized. c. all potential gains from trade among buyers are sellers are being realized. d. the allocation achieves equality as well.
During the mid-1980s, we observed a significant reduction in oil prices. In the United States, we would expect that this reduction in oil prices would cause
A) a larger reduction in the CPI compared to the GDP deflator. B) an equal reduction in the CPI and GDP deflator. C) a larger reduction in the GDP deflator compared to the CPI. D) no change in the CPI and a reduction in the GDP deflator.
When comparing income inequality across nations, one finds that the United States is
a. the least equal nation in the world. b. more equal than most nations but not the most equal. c. the most equal nation in the world. d. less equal than most nations but not the least equal.
The production possibility frontier is a graph that shows
A. all the combinations of goods and services that are consumed over time if all of society's resources are used efficiently. B. the rate at which an economy's output will grow over time if all resources are used efficiently. C. the amount of goods and services consumed at various average price levels. D. all the combinations of goods and services that can be produced if all of society's resources are used efficiently.