If Indiana has an absolute advantage over Maine in producing both corn and ball bearings, then
a. Indiana should produce both corn and ball bearings
b. there are no benefits possible from specialization
c. Maine should produce ball bearings and Indiana should produce corn
d. Indiana should produce ball bearings and Maine should produce corn
e. they still may benefit from specialization, but more information is needed to determine which state should specialize in each
E
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In the late 1980s, some medical authorities announced that an acne medication named Retin-A had previously unknown wrinkle-reducing properties. An economist would predict that, following this announcement, the price of Retin-A ____ and the quantity sold__.
A. would rise; would decrease B. would rise; would increase C. would fall; would fall D. would fall; would rise
When a country's nominal exchange rate appreciates, the price of
A) that country's goods abroad increases. B) that country's goods abroad decreases. C) foreign goods sold in the country increases. D) that country's goods produced and sold at home increases.
The Consumer Price Index compares the:
a. prices of all goods and services in the economy compared to the prices of those goods and services in a base year. b. prices of consumer goods and services that a household purchases to the prices of those goods and services purchased in a base year. c. prices of producer goods and services that are made for consumers to the prices of those goods and services in a base year. d. prices of goods and services that are purchased by producers to the prices of those goods and services in a base year. e. prices of goods and services that are purchased by consumer manufacturers to the prices of those goods and services in a base year.
In response to the financial crisis which followed the housing bubble collapse, policy-makers feared stimulating demand would cause:
A. low economic growth despite low inflation and low unemployment. B. high inflation despite high economic growth and low unemployment. C. high inflation despite low economic growth and high unemployment. D. high unemployment despite low inflation and low economic growth.