Which of the following is true of exchange?
a. Exchange is a zero sum activity; if one party gains, the other must lose an equal amount.
b. The exchange value of a good is determined by the cost of the resources required to produce the good.
c. The total output that trading partners are able to produce is not influenced by whether they trade with each other.
d. Exchange permits trading partners to expand their total output of goods and services as the result of greater specialization in areas where each has a comparative advantage.
d. Exchange permits trading partners to expand their total output of goods and services as the result of greater specialization in areas where each has a comparative advantage.
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The law of demand says that the lower the price of a good, other things constant,
a. the smaller the demand for that good b. the larger the demand for that good c. the smaller the quantity demanded of that good d. the larger the quantity demanded of that good e. the smaller the real income of consumers and the lower the quantity demanded of that good
If a monopolist's price were $8, it is likely that in equilibrium
A. MC = MR, and both are less than $8. B. MC = MR, and both are more than $8. C. MC = MR, and both are equal to $8. D. None of the choices are correct.
Clara states that "there is a high correlation between the level of people's education and the level of their income." Ellie replies that the correlation occurs because "more education is the best way to earn more income in this country."
a. Both Clara's and Ellie's statements are positive b. Clara's statement is normative and Ellie's statement is positive c. Both Clara's and Ellie's statements are normative d. Clara's statement is positive and Ellie's statement is normative
The table below shows the number of labor hours required to produce one gallon of wine and one pound of cheese in the United States and France. The United States has an absolute advantage in the production of Labor hours to make:In the United StatesIn France1 gallon of wine4.001.001 pound of cheese1.002.00
A. only cheese. B. both wine and cheese. C. only wine. D. neither wine nor cheese.