The price of one good divided by the price of another good is a
A) money price.
B) relative price.
C) budget constraint.
D) divisible good.
B
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Assume the United States and Australia have the same amount of resources. In a given time period, the United States can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that
A. Australia has an absolute advantage in both beef and cars. B. Australia has a comparative advantage in cars. C. The United States has an absolute advantage in both beef and cars. D. The United States has a comparative advantage in beef.
Suppose the CPI does indeed overstate the inflation rate. When the CPI increases by 5 percent and household incomes increase by 5 percent, we should conclude that real incomes of households have:
A. increased. B. increased more slowly than has inflation. C. stayed constant. D. decreased.
Which of the following groups does not have an interest in restricting free trade?
A. People who buy the imported product. B. Producers in import-competing markets. C. Communities where workers in import-competing markets live. D. Workers in import-competing markets.
If the interest rate falls, you would expect the price of any stock to
A. rise. B. fall. C. be unaffected. D. fall to zero.