Declines in spending on residential construction are often due to increases in interest rates. The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates
A) the financial crisis that began in 2007
B) the rapid inflation of the early 2000s
C) increases in the price of lumber
D) rising wages in the construction industry
Answer: A
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Using the specific factors model, assume that strawberry production requires the specific factor of land, tractor production requires the specific factor of capital, and labor is variable
If the United States is capital abundant compared to Mexico, and Mexico is land abundant compared to the United States, then in the short run with trade we would expect A) the income of U.S. land owners to increase. B) the income of U.S. workers to increase. C) the income of Mexican workers to increase. D) the income of Mexican land owners to increase.
To say that a price ceiling is nonbinding is to say that the price ceiling a. results in a surplus
b. is set above the equilibrium price. c. causes quantity demanded to exceed quantity supplied. d. All of the above are correct.
Economic profit is greater than or equal to accounting profit
a. True b. False Indicate whether the statement is true or false
Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near-extinction of the wild rhinoceros. What do these problems have in common?
a. Private markets could easily solve them if governments left the markets alone. b. They would all go away if the government sponsored an intensive public-information campaign. c. They are all the result of a failure to establish clear property rights over something of value. d. They are all the result of a failure of corrective taxes.