Foreign countries buy $1.2 trillion of U.S. goods and services. U.S. residents purchase $1.8 trillion of foreign goods and services. What is net exports?
-$600 billion
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"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other, only the country with the absolute advantage gains"
Is the previous statement correct or incorrect? Briefly explain your answer.
"The law of diminishing returns is the same as the decreasing returns to scale." Do you agree? Explain
What will be an ideal response?
Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. Total profit for Billy’s Bean Bag Emporium would be
a. -$3,875. b. $30,000. c. $28,500. d. $26,125.
Suppose saving is $1,000 when income is $10,000 and the MPC equals 0.9. When income increases to $15,000, saving is
A. $1,500. B. $1,400. C. $900. D. $500.