What are conflict diamonds and what do they illustrate about resource use?
What will be an ideal response?
“Conflict diamonds” refers to the situation in which diamonds are mined in war zones. This mining is very wasteful because of the uncertainty over the control of the mine as the war can change which army controls the mine. The incentive in this case results in more current extraction and makes it more difficult and expensive to extract in the future when the war ends and the nation needs the revenue. Conflict diamonds illustrate the point that a resource will be extracted too quickly if there is no way to profit from conservation.
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Campaign speeches normally include normative economic statements
Indicate whether the statement is true or false
In 1980, in order to stimulate agricultural production, Fidel Castro allowed Cuban farmers to sell their goods directly to consumers and keep whatever profit they made. Some farmers were earning $50,000 per year, compared with the average worker income of $2,400. The workers resented this. Castro denounced the farmers as “capitalist gangsters” and closed the free markets. Cuban cash income declined 5 percent and fresh vegetables were in short supply. This illustrates the economic concept of the
A. law of comparative advantage. B. equality-efficiency trade-off. C. cost disease of the service sector. D. unemployment-inflation trade-off. E. All of these responses are correct.
A basic assumption used in most economic theories is that:
A. as price decreases, quantity demanded will decrease. B. whatever goes up must come down. C. what is true for a part of the whole must also be true for the whole. D. all other things remain the same.
The following are explanations of the Law of Demand, except:
A. Expectations effect B. Diminishing marginal utility C. Income effect D. Substitution effect