In France, two qualities of wines are produced - table wine sold in bulk (bring your own bottle) and a higher quality of wine. Suppose that the English import all their wine from France. Then, we would we expect to find, on average that
a. the English drink more of the higher quality of wine, because transportation costs will lower the relative price of high-quality wine relative to table quality wine.
b. the English will drink more table quality wine, because transportation costs will raise the relative price of table quality wine to high-quality wine.
c. the French will drink more of the high quality wine because transportation costs reduce demand for wine in England.
d. the French will drink more of the high quality wine because the wine is produced there.
a. the English drink more of the higher quality of wine, because transportation costs will lower the relative price of high-quality wine relative to table quality wine.
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Paul's Plumbing is a small business that employs 12 people. Which of the following is the best example of an implicit cost incurred by this firm?
a. The tax payments on property owned by the firm. b. The wages paid to the 12 employees. c. The half of the payroll taxes on the wages of the 12 employees paid by the employers, but not the half paid by the employees. d. The accounting services provided free of charge to the firm by Paul's wife, who is an accountant.
During recessions
a. sales and profits fall. b. sales and profits rise. c. sales rise, profits fall. d. profits fall, sales rise.
Which of the following statements best completes this sentence: "On a bank's balance sheet…"?
A. net worth represents both a source and a use of funds. B. net worth shows the sources of funds and liabilities show the uses of funds. C. assets show the uses of funds and liabilities show the sources of funds. D. assets show the sources of funds and the net worth shows the uses of funds.
One family earned an income of $28,000 in 1995. Over the next five years, their income increased by 15 percent, while the CPI increased by 12 percent. After five years, this family's nominal income ________, and their real income ________.
A. decreased; increased B. increased; did not change C. decreased; decreased D. increased; increased