Open market purchase will result in:
A) increase in bank reserves and a decrease in the federal funds rate.
B) increase in bank reserves and an increase in the federal funds rate.
C) decrease in bank reserves and a decrease in the federal funds rate.
D) decrease in bank reserves and an increase in the federal funds rate.
A
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A country will export wheat if, with no international trade, ______
A. it produces a surplus of wheat B. its opportunity cost of producing wheat is below the world price C. its domestic price of wheat exceeds the world price D. other countries have a shortage of wheat
Suppose that for Alicia the marginal benefit (MB) of producing is $75 and that the marginal cost (MC) of producing is $5. Suppose also that her marginal benefit of stealing is $85 and the marginal cost of stealing is $5. Is Alicia currently maximizing utility in terms of producing and stealing? If not, should she produce more and steal less, or produce less and steal more to move toward utility maximization?
A. Yes, Alicia is maximizing utility. B. No, Alicia is not maximizing utility. Since the MB/MC ratio for producing is less than the MB/MC ratio for stealing, Alicia should produce more and steal less. C. No, Alicia is not maximizing utility. Since the MB/MC ratio for producing is greater than the MB/MC ratio for stealing, Alicia should produce more and steal less. D. No, Alicia is not maximizing utility. Since the MB/MC ratio for producing is less than the MB/MC ratio for stealing, Alicia should steal more and produce less.
If exports exceeded imports it would be called a trade __________.
Fill in the blank(s) with the appropriate word(s).
Which of the following statements is true about comparative advantage?
a. Comparative advantage exists whenever one person, firm, or nation can do something at higher opportunity costs than some other individual, firm, or nation. b. Comparative advantage is interesting theoretically, but it is not relevant when evaluating real-world economic conditions. c. Low income countries cannot possibly have a comparative advantage in the production of any good or service because of the relatively low literacy rate. d. Comparative advantage exists whenever one person, firm, or nation can do something at lower opportunity costs than some other individual, firm, or nation. e. Only technologically advanced economies can have a comparative advantage in the production of a good or service.