Which of the following statements is TRUE?
A) APC + APS = 1
B) APC + APS < 1
C) APC + MPS = 1
D) APC + APS + MPC + MPS = 1
A
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The price of domestic goods in terms of foreign goods is referred to as
A) the nominal exchange rate. B) the relative inflation rate. C) the real exchange rate. D) the current account balance.
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian workercan produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true? The United States has an absolute advantage:
A. and a comparative advantage in the production of shoes. B. and a comparative advantage in the production of apples. C. in the production of both goods and a comparative advantage in the production of neither good. D. in the production of both goods and a comparative advantage in the production of both goods.
Profits or losses must be temporary for perfectly competitive firms. Why?
Jury verdicts that award wildly inflated compensation to victims for "pain and suffering" in medical malpractice cases serve indirectly to
A. encourage high quality medical care at the lowest possible cost. B. reward physicians for treating indigent patients. C. increase the cost of medical care in the U.S. D. provide incentives for efficient operation of Medicare and Medicaid.