Let Kj and Lj denote the capital and labor inputs in the production of good j (j = S,T), then good S is said to be capital intensive relative to good T if
A) KS > KT.
B) KS/LS > KT/LT.
C) LS < LT.
D) All of the above.
B
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Which of the following statements is true of the gains to trade?
A) The gains to trade expand as trading partners become more alike. B) The gains to trade shrink as trading partners become more alike. C) The trading nations can enjoy gains to trade even when none of these countries has a comparative advantage in the production of any good. D) The gains to trade are equal for all trading partners.
Suppose Hanna spends her entire budget buying bagels and cups of coffee each day. Also, suppose the marginal utility of her last bagel is 100 and the marginal utility of her last cup of coffee is 200
If the price of a bagel is $4 and the price of a cup of coffee is $2, then A) Hanna needs to decrease her consumption of bagels to maximize her utility. B) Hanna needs to increase her consumption of bagels to maximize her utility. C) Hanna should buy half as many bagels as coffee in order to maximize her utility. D) bagels must provide more total utility than coffee.
What happens in the foreign exchange market if the U.S. interest rate increases? What is the effect on the exchange rate?
What will be an ideal response?
By holding insurance a person
a. reduces the risk of a bad outcome, such as their house burning down. b. shares risk and so reduces the burden of risk. c. Both A and B are correct. d. Neither A nor B are correct.