The ceteris paribus assumption means
A) favors are returned in kind.
B) this is the proof of the matter.
C) from many, one.
D) other things are equal.
Answer: D
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When Mik has an absolute advantage in the production of two goods over Tommy, Mik
A) is less productive than Tommy. B) is better off if he does not engage in specialization and trade with Tommy. C) is more productive in producing both goods than Tommy. D) always has a comparative advantage over Tommy in the production of both goods. E) cannot gain from trade with Tommy.
Assume the market for cage-free eggs is perfectly competitive. All else equal, as more farmers choose to produce and sell cage-free eggs, what is likely to happen to the equilibrium price of the eggs and profits of these farmers in the long run?
A) The equilibrium price is likely to remain unchanged and profits are likely to increase. B) The equilibrium price is likely to decrease and profits are likely to decrease. C) The equilibrium price is likely to increase and profits are likely to increase. D) The equilibrium price is likely to increase and profits are likely to remain unchanged.
Ordinarily, governments attempt to promote competition in markets. Why do governments use patents to block entry into some markets when this prohibits competition?
A) Politicians sometimes succumb to pressure from lobbyists to grant favors to businesses for political reasons. B) Patents are an important source of government revenue. C) Patents are justified because they are an important means for creating network externalities. D) Patents encourage firms to spend money on research necessary to create new products.
A statistical discrepancy
a. exists because data sources are not perfect, so measures of expenditures and income are not equal. b. insures that GDP will approximately equal GNP. c. explains the close association between GDP and quality of life measures such as literacy and life expectancy. d. explains the inadequacy of GDP in capturing the value of leisure and the value of a clean environment.