The data in the table above shows the consumption by families in a small (poor) economy. The families consume only salt and bread. The reference base period is 2011. The cost of the CPI market basket in 2011 is
A) $64.00.
B) $3.50.
C) $52.00.
D) $5.00.
E) $100.
C
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Refer to Figure 7-4. With insurance and a third-party payer system, what is the amount of the deadweight loss?
A) $0 B) $1,500 C) $3,000 D) $9,500
Governments sometimes erect barriers to trade other than tariffs and quotas. Which of the following is not an example of this type of trade barrier?
A) a requirement that the U.S. government buy military uniforms only from U.S. manufacturers B) a requirement that imports meet health and safety requirements C) restrictions on imports for national security reasons D) a requirement that the employees of domestic firms that engage in foreign trade pay income taxes
Suppose the country of Maverick has specialized in the production of a good but has not yet entered into trade. At this point in time, Maverick has
A. Moved to a level of consumption outside its production possibilities curve. B. Moved along its existing production possibilities curve. C. Moved to a level of production outside its production possibilities curve. D. Shifted its production possibilities curve outward.
Assuming that leisure is a normal good, if an individual's labor supply curve is upward sloping, then the
A. substitution effect outweighs the income effect at higher wages. B. income effect outweighs the substitution effect at higher wages. C. income effect and the substitution effects are equal. D. income effect is zero.