Direct foreign investment in the LDCs
a. explains whatever economic growth the LDCs had in the last quarter of the 20th century
b. pushes the production possibilities curve inward toward the origin because resources are being diverted from the LDCs' own production activities
c. leads to substantial LDC debt to rich nations
d. cannot help the LDCs and can actually hinder their development because LDCs become reliant on it
e. can help the LDCs but cannot be a substitute for their own development efforts
E
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A tax wedge causes
A. consumer prices to equal producer prices. B. producer prices to rise above consumer prices. C. consumer prices to separate from producer prices. D. all prices to fall.
An auction for mineral rights on an unexploited oilfield can be characterized as
a. A common value auction b. A private value auction c. Highest value d. None of the above
Specialization according to comparative advantage means that a country is producing the goods:
A. for which it has a relatively high opportunity cost. B. for which it has a relatively low opportunity cost. C. that it wants to consume. D. that it can produce at zero cost.
Suppose that a study of changes in admission prices reveals that when the price of admission to the museum increases by 10%, adults reduce their ticket purchases by 10%, senior citizens reduce their ticket purchases by 20%, college students reduce their ticket purchases by 25%, and children reduce their ticket purchases by 30%. If the cost of having a person visit the museum is the same regardless of whether the person is an adult, senior citizen, college student, or child, which of the following pricing schemes is the most likely to be used by the museum and why?
A. The museum will set one price of $12 for everyone because that is the most fair. B. $8 for children, $10 for college students, $12 for senior citizens, and $15 for adults because the museum can earn higher profits by charging the highest price to those with the least elastic demand and the lowest price to those with the most elastic demand. C. $8 for children, $10 for college students, $12 for senior citizens, and $15 for adults because the museum can earn higher profits by charging the lowest price to those with the least elastic demand and the highest price to those with the most elastic demand. D. $15 for children, $12 for college students, $10 for senior citizens, and $8 for adults because the adults are most likely to visit and the children are least likely to visit.