Explain why purchasing power parity measures of income levels tend to show a smaller difference between poor and rich countries
What will be an ideal response?
PPP measures show the number of units of developing country currency required to purchase a basket of goods and services in the developing country market that costs
one dollar in the U.S. Prices for most services tend to be much cheaper in developing countries than in the U.S.
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The largest expenditure category in the United States is
A) consumption expenditure. B) wages. C) net exports of goods and services. D) government expenditure on goods and services. E) investment.
In a perfectly competitive market, producers efficiently use their scarce resources to produce what consumers want and as a result they achieve: a. productive efficiency
b. allocative efficiency. c. economic efficiency. d. constant returns of scale.
An increase in the price of gasoline will lead to a(n)
a. increase in the supply of gasoline b. decrease in the supply of gasoline c. no change in the supply of gasoline d. decrease in the quantity of gasoline supplied e. increase in the quantity of gasoline supplied
A profit-maximizing price searcher will expand output to the point where
a. total revenue equals total cost. b. marginal revenue equals marginal cost. c. price equals average total cost. d. price equals marginal cost.