Gains from trade
A) result in being able to consume beyond the trading individuals' production possibilities frontiers.
B) occur when one party to the trade has an absolute advantage in both goods.
C) occur when people do not specialize.
D) occur when opportunity costs are equal.
E) always benefit one party but not the other party of any trade.
A
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Answer the following statements true (T) or false (F)
1. The demand for necessities and goods that require a small expenditure tends to be price inelastic. 2. If total revenue decreases when a price is decreased, the demand for the commodity is elastic. 3. If the coefficient of elasticity for a commodity is 1.5 and the price of that commodity is raised, total revenue will decrease. 4. The slope of a demand curve is a measure of elasticity. 5. The demand for a fur coat tends to be more price elastic than the demand for automobile tires.
Among economists, it is generally believed that
A) the federal budget deficit will be eliminated within 10 years. B) the public debt will be paid off within 10 years. C) entitlement spending will continue to decline. D) the federal government will find it difficult to cut entitlement programs.
The demand curve faced by a firm with a patent on a marketable product
a. is horizontal b. is vertical c. slopes upward d. slopes downward e. is nonexistent
Other things constant, an increase in resource prices will:
a. increase aggregate demand. b. decrease aggregate demand. c. decrease aggregate supply. d. increase aggregate supply.