If the price of orange juice rises, the demand for grapefruit juice will
a. increase because the two goods are substitutes
b. increase because it is a complement
c. decrease because the two goods are substitutes
d. decrease because the two goods are complements
e. not change unless the price of grapefruit juice also changes
A
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A country exports the goods
A) for which its domestic prices are very high compared to the world prices. B) that the economy can produce the most of. C) that the economy can produce at relatively lowest opportunity cost. D) that it cannot sell domestically. E) in which it has a comparative disadvantage.
When each country specializes in producing the good for which it has a comparative advantage:
A. both countries may benefit. B. both countries always enjoy equal gains from trade. C. the country that is bigger will gain more surplus. D. the country with the weaker economy will gain more surplus.
An example of income received but not earned is
A) government transfer payments. B) undistributed profits. C) compensation of employees. D) rental income. E) a and c
Refer to Figure 7.1. Which of the following are the combinations of movies and T-shirts that would exhaust the budget?
A. A and E B. C and F C. D and E D. A and G