Which of the following appropriately applies the law of comparative advantage?
a. Countries with small amounts of labor relative to capital should specialize in producing labor-intensive commodities.
b. Since Mexican labor is cheaper than American labor, trade between the countries results in exploitation of American workers.
c. Since workers in countries such as the United States utilize larger amounts of capital than workers in less developed nations, trade between capital-rich and capital-poor nations results in the exploitation of labor in the less developed countries.
d. Countries that are low cost producers of agricultural products should trade those products for goods they can produce only at a high opportunity cost.
D
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A mugger steals $25 from John Doe. What can an economist conclude?
A) Nobody gained in the "exchange." B) Both parties gained in the "exchange." C) Only the mugger's wealth has increased. D) Nothing, because economists study strictly voluntary exchanges.
Keynesian economics predicts that if government policy makers deem current equilibrium real Gross Domestic Product (GDP) to be "too low," then an appropriate policy action would be to
A) do nothing, because the economy is self-adjusting. B) raise government spending, thereby increasing aggregate demand and pushing up real Gross Domestic Product (GDP) with little or no inflationary consequences. C) increase taxes, thereby causing aggregate demand to increase and inducing a rise in real Gross Domestic Product (GDP) with little or no inflationary consequences. D) reduce the money stock, thereby causing aggregate demand to decrease and inducing a rise in fall in the price level that generates an increase in total planned expenditures.
Suppose that during a period of inflation, the Fed reduced its holdings of U.S. securities from $600 billion to $580 billion. This indicates that the Fed was
a. seeking to reduce the money supply to decrease inflation. b. trying to force Congress to decrease taxes. c. expanding the money supply and stimulating employment. d. expanding the money supply, even though the existing inflation suggested a restrictive policy would be more appropriate.
Consumer surplus in the unregulated monopoly market in the figure below is: 
A. $8. B. $4. C. $0. D. $16.