Refer to Table 4-1. The table above lists the highest prices three consumers, Tom, Dick, and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars
A) Tom will receive $12 of consumer surplus from buying one shirt.
B) Harriet will receive $25 of consumer surplus since she will buy no shirts.
C) Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts.
D) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts.
A
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The increase in wage inequality resulting from globalization can be reversed through:
A. making markets more competitive. B. revoking the principle of comparative advantage. C. decreases in worker mobility. D. increases in worker mobility.
Which of the following is not a limitation of the survivor technique for measuring the optimum size of firms within an industry?
a. since the technique does not employ actual cost data in the analysis, there is no way to assess the magnitude of the cost differentials between firms of varying size and efficiency. b. the managerial and entrepreneurial aspects of the production process are not included in the analysis c. because of legal factors, the long-run cost curve derived by this technique may be distorted and may not measure the cost curve postulated in economic theory d. a and b e. b and c
James has a comparative advantage in the production of corn, while Harry has a comparative advantage in the production of bread. If James and Harry decide to trade with each other, _____
a. both Harry and James will enjoy gains from trade b. only Harry will enjoy gains from trade c. only Harry will suffer losses from trade d. only James will suffer loses from trade e. neither of them will gain from trade
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline