The amount of good A given up for good B in trade is the
A. Comparative advantage.
B. Absolute advantage.
C. Exploitation of consumers.
D. Terms of trade.
Answer: D
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Refer to Figure 4-3. What area represents consumer surplus at the equilibrium price of P1?
A) A + B + C + D + E B) A + B + C C) D + E D) A
When the Federal Reserve decreases the money supply, at the previous equilibrium interest rate households and firms will now want to
A) sell Treasury bills. B) hold less money. C) neither buy nor sell Treasury bills. D) buy Treasury bills.
Which of the following is not true of monopolists?
a. The entry of new firms is not a major concern. b. Monopolists seek to maximize profits. c. Monopolists can charge any price they want and make a profit. d. Monopolists can choose any point on the market demand curve. e. Monopolists can raise price more than 10 percent.
The phrase "capital formation" is synonymous with
a. investment spending. b. buying shares of stock. c. creating mutual funds. d. purchasing financial assets.