In economics, international trade is based on the existence of
A) absolute advantage between countries.
B) relative advantage between countries.
C) comparative advantage between countries.
D) output advantage between countries.
C
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Fractional reserve banking began
A) in ancient Greece. B) in the early nineteenth century. C) in the early twentieth century. D) in the Middle Ages.
The relationship between a change in the price of a complementary good and demand for another complementary good is
A) positive. B) negative. C) inconclusive. D) zero.
If a firm faces perfectly competitive product and factor markets and the marginal product of labor and capital are 4 and 9, respectively, while the wage rate is $2 and the rental rate on capital is $4, the firm should
A) use relatively more capital. B) use relatively less capital. C) increase all inputs proportionately. D) decrease all inputs proportionately.
An increase in demand coupled with an increase in supply results in a(n)
a. increase in price and an ambiguous effect on equilibrium quantity b. increase in equilibrium quantity and a decrease in equilibrium price c. decrease in equilibrium quantity and an ambiguous effect on equilibrium price d. increase in economic rent e. ambiguous effect on equilibrium price and an increase in equilibrium quantity