The change in the quantity consumed that is caused by a change in the relative price of a good, with real income held constant, refers to the:
A. substitution effect.
B. income effect.
C. equimarginal rule.
D. law of diminishing marginal utility.
Answer: A
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During the antebellum period, the majority of the family labor on farms was devoted to investment type of activities—clearing land, constructing fences and buildings, and feeding and breeding livestock
Indicate whether the statement is true or false
Consider the following information, and assume that opportunity costs are constant: On one hand, residents of Country A can produce more corn in a year than residents of Country B, but they can produce computers at a lower opportunity cost than residents of country B. On the other hand, residents of country B can produce more computers in a year than residents of Country A, but they can produce corn at a lower opportunity cost than residents of country A. It can be concluded that residents of
A) Country A should produce corn and trade it for computers produced in Country B. B) Country B should produce computers and trade them for corn produced in Country B. C) Country A should produce computers and trade them for corn produced in Country B. D) both countries should choose not to trade.
Answer the following statement(s) true (T) or false (F)
1. Fiscal policy refers to the government's ability to print money. 2. Kobe beef, which some consider the best beef in the world, is produced in Japan and sold in the U.S. (in extremely limited quantities); this is an example of a U.S. import.
The United States' balance of payments is likely to improve when
A) there is an increase in political instability in other countries. B) the inflation rate in the United States rises relative to other countries. C) the American government increases its spending on foreign aid. D) American people want to invest more in foreign countries.