The theory of comparative advantage suggests that trade should happen
a. between economies with small differences in opportunity costs of production.
b. between economies with large differences in opportunity costs of production.
c. between economies with large differences in specialization.
d. between economies with small differences in specialization.
b. between economies with large differences in opportunity costs of production.
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If expectations are adaptive, how will the economy adjust to a new long-run equilibrium in response to contractionary monetary policy? Support your answer with a graph of the Phillips curve
What will be an ideal response?
The numerical value of a price elasticity represents the percentage amount by which the quantity demanded changes when the price
a. increases by 1 unit b. changes by 1 percent c. is in equilibrium d. is fixed in the market e. falls by 1 dollar
The balance of payments includes
a. only exports, imports, and service transactions. b. the balance on current account, plus all capital transactions and all official transactions and the statistical discrepancy. c. only the official transactions. d. all goods and services produced in a nation’s economy during a given year.
Answer the following statements true (T) or false (F)
1. The median income of white households is greater than the median income of all households in the United States. 2. Labor market discrimination on the basis of sex or race is usually person-specific rather than a general labor practice. 3. The fact that women in large numbers choose careers in education and nursing may be the result of occupational segregation. 4. An equitable distribution of income is based on an objective standard, such as the perceived productivity of the individual. 5. The goal of every economic system should be the elimination of income inequality.