One of the economic changes that has most dramatically reshaped the world is:
A. the rapid growth of China's economy.
B. the rapid decline of Haiti's economy.
C. the unemployment rate declining in the U.S. by 40 percent.
D. the rapid growth of Italy's economy.
A. the rapid growth of China's economy.
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Steve and Lee have been shipwrecked on a deserted island in the Hawaiian chain. Their economic activity consists of either gathering pineapples or fishing. We know Steve can catch four fish in one hour or harvest two baskets of pineapples. In the same
time Lee can reel in two fish or harvest two baskets of pineapples. If they each spend four hours a day fishing and four hours a day harvesting pineapples, how many of each will Steve produce? How many will Lee produce? What will their total production be? If Steve and Lee don't trade with each other, who is better off? Why? Assume Lee and Steve both operate on straight-line production possibilities curves. What is Steve's opportunity cost of producing a basket of pineapples? Of a producing a fish? What is Lee's opportunity cost of producing a basket of pineapples? Of a producing a fish? If Steve and Lee traded, who has the comparative advantage in fish? Pineapples? If Lee and Steve specialize in and trade the good in which they have a comparative advantage, how much of each good will be produced in an eight hour day? What are the gains from trade?
Suppose most people regard emeralds, rubies, and sapphires as close substitutes for diamonds. Then DeBeers, a large diamond company, has
a. less incentive to advertise than it would otherwise have. b. less market power than it would otherwise have. c. more control over the price of diamonds than it would otherwise have. d. higher profits than it would otherwise have.
A tax is regressive if it:
A. Takes a higher percentage of income as income increases B. Takes the same percentage of income regardless of income level C. Takes a smaller percentage of income as income increases D. Is levied on consumers
Refer to the figure above. Which apartment is the best feasible choice for the individual?
A) Apartment 1 B) Apartment 2 C) Apartment 3 D) Apartment 4