Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should export
A. wheat and cloth; country B should not export anything.
B. cloth and country B should export wheat.
C. nothing and country B should export both wheat and cloth.
D. wheat and country B should export cloth.
Answer: D
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A. cars; cheese B. cheese; cheese C. cars; cars D. cheese; cars
According to this Application, during the late 1980s, Argentina pegged its currency to the U.S. dollar. After 1995, the U.S. dollar appreciated sharply on world markets. Since the Argentinean peso was pegged to the U.S
dollar, the appreciation of the dollar essentially caused A) the peso to appreciate relative to the dollar, but depreciate on world markets. B) a sharp devaluation of the dollar relative to the peso. C) a severe revaluation of the peso relative to the dollar. D) the peso to also appreciate sharply on world markets.
The Utah Pie case is an example of a violation of the Celler-Kefauver Act
a. True b. False Indicate whether the statement is true or false
When a good commodity is driven out of the market by a bad commodity, the result is called:
a. moral hazard. b. adverse selection. c. positive externality. d. negative externality. e. the commons problem.