From the mid 1980s to the present, the United States
a. had only a small current account deficit.
b. had a large capital account deficit, which in the balance of payments accounts was financed with a surplus in the current account, which in turn financed investment in excess of domestic saving.
c. has had a large current account deficit, which in the balance of payments accounts was financed with a surplus in the capital account, that in turn financed investment in excess of domestic saving.
d. None of the above
C
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Suppose Ralph sells bento lunches, which have the following demand:
pR = 100 – qR – 0.5qD where pR is the price of Ralph's bentos and qR is the number of bentos Ralph sells. qD is the number of bentos Ralph's rival, Dave, sells. Dave's demand is given by: pR = 100 – qD – 0.5qR where pD is the price Dave can sell his bentos for. Suppose each seller has a cost per unit (average and marginal) of $1. a. How does this game differ from the Cournot model with identical products? Why do the demand curves indicate that the goods are differentiated – not perfect substitutes for one another? b. Compute the best response functions for each seller and the Nash Equilibrium outputs and prices.
If labor in Mexico is less productive than labor in the United States in all areas of production,
a. then neither nation can benefit from trade. b. then Mexico can benefit from trade but the United States cannot. c. then the United States will have a comparative advantage relative to Mexico in the production of all goods. d. then both Mexico and the United States still can benefit from trade.
If firms were forced to take into account the full social costs of production, then
A. output could be increased and pollution levels would decrease. B. output would be unaffected but pollution levels would come down. C. output would decrease but pollution levels would probably remain at the same levels. D. output and pollution levels would decrease.
Average total cost
A. the sum of fixed cost and average variable cost. B. is the average cost of producing each unit of output. C. is always increasing. D. measures the spread of overhead across output.