Econ 2103 midterm
A key determinant of the price elasticity of supply is the a) time horizon. b) income of consumers. c) price elasticity of demand. d) importance of the good in a consumer's budget.
A
A rightward shift of a demand curve is called a(n) a) increase in demand. b) decrease in demand. c) decrease in quantity demanded. d) increase in quantity demanded.
A
A university's football stadium is never more than half-full during football games. This indicates a) the ticket price is above the equilibrium price. b) the ticket price is below the equilibrium price. c) the ticket price is at the equilibrium price. d) nothing about the equilibrium price.
A
Alice and Betty's Production Possibilities in one 8-hour day. Refer to Figure 3-10. If Alice produces only lemonade, she can produce a) 200 pitchers per day. b) 300 pitchers per day. c) 400 pitchers per day. d) 450 pitchers per day.
A
Alice and Betty's Production Possibilities in one 8-hour day. Refer to Figure 3-10. If point A represents Alice's production and point B represents Betty's production, a) Alice produces 200 pitchers of lemonade and 100 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas. b) Alice produces 180 pitchers of lemonade and 180 pizzas while Betty produces 200 pitchers of lemonade and 100 pizzas. c) Alice produces 100 pitchers of lemonade and 200 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas. d) Only Alice can benefit from specialization and trade.
A
Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. Minutes Needed to Make 1 Bushel of Wheat B: 10 T: 6 Pound of Beef B: 12 T: 10 Refer to Table 3-20. What is Brad's opportunity cost of producing one bushel of wheat? a) 5/6 pound of beef b) 6/5 pounds of beef c) 3/5 pounds of beef d) 5/3 pounds of beef
A
Elasticity is a) a measure of how much buyers and sellers respond to changes in market conditions. b) the study of how the allocation of resources affects economic well-being. c) the maximum amount that a buyer will pay for a good. d) the value of everything a seller must give up to produce a good.
A
Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. Refer to Figure 3-11. If the production possibilities frontier shown is for 240 hours of production, then which of the following combinations of ham and cheese could Bonovia produce in 240 hours? a) 225 pounds of ham and 140 pounds of cheese b) 280 pounds of ham and 100 pounds of cheese c) 355 pounds of ham and 80 pounds of cheese d) 330 pounds of ham and 60 pounds of cheese
A
Figure 3-25 Chile's Production Possibilities FrontierColombia's Production Possibilities Frontier Refer to Figure 3-25. Colombia should specialize in the production of a) coffee and import soybeans. b) soybeans and import coffee. c) both goods and import neither good. d) neither good and import both goods.
A
For a market for a good or service to exist, there must be a a) group of buyers and sellers. b) specific time and place at which the good or service is traded. c) high degree of organization present. d) All of the above are correct.
A
For a particular good, a 5 percent increase in price causes a 15 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? a) There are many substitutes for this good. b) The good is a necessity. c) The market for the good is broadly defined. d) The relevant time horizon is short.
A
For which pairs of goods is the cross-price elasticity most likely to be negative? a) peanut butter and jelly b) automobile tires and coffee c) pens and pencils d) paperback novels and electronic books for e-readers
A
Goods with many close substitutes tend to have a) more elastic demands. b) less elastic demands. c) price elasticities of demand that are unit elastic. d) income elasticities of demand that are negative.
A
In a market economy, supply and demand determine a) both the quantity of each good produced and the price at which it is sold. b) the quantity of each good produced but not the price at which it is sold. c) the price at which each good is sold but not the quantity of each good produced. d) neither the quantity of each good produced nor the price at which it is sold.
A
One thing economists do to help them understand how the real world works is a) make assumptions. b) ignore the past. c) try to capture every aspect of the real world in the models they construct. d) All of the above are correct.
A
Pizza is a normal good if the demand a) for pizza rises when income rises. b) for pizza rises when the price of pizza falls. c) curve for pizza slopes upward. d) curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.
A
Refer to Figure 4-27. Panel (a) shows which of the following? a) an increase in demand and an increase in quantity supplied b) an increase in demand and an increase in supply c) an increase in quantity demanded and an increase in quantity supplied d) an increase in quantity demanded and an increase in supply
A
Refer to Figure 4-27. Panel (b) shows which of the following? a) a decrease in demand and a decrease in quantity supplied b) a decrease in demand and a decrease in supply c) a decrease in quantity demanded and a decrease in quantity supplied d) a decrease in quantity demanded and a decrease in supply
A
Table 2-5 Corn (in bushels) Wheat (in bushels) 2000 0 1600 700 1200 1300 800 1800 400 2200 0 2500 Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is: a) bowed outward indicating increasing opportunity costs. b) bowed outward indicating decreasing opportunity costs. c) a straight line indicating constant opportunity costs. d) bowed inward indicating increasing opportunity costs.
A
The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the a) amount of the other good that must be given up. b) market price of the additional amount produced. c) amount of resources that must be devoted to its production. d) number of dollars that must be spent to produce it.
A
The price elasticity of demand measures a) buyers' responsiveness to a change in the price of a good. b) the extent to which demand increases as additional buyers enter the market. c) how much more of a good consumers will demand when incomes rise. d) the movement along a supply curve when there is a change in demand.
A
When the price of candy bars is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for candy bars is a) inelastic. b) elastic. c) unit elastic. d) perfectly inelastic.
A
Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue? a) 0.3 b) 1 c) 1.8 d) None of the above could be correct.
A
A CPA recently has come to expect higher prices for expert tax advice in the near future. We would expect a) the CPA to supply more expert tax advice now than she was supplying previously. b) the CPA to supply less expert tax advice now than she was supplying previously. c) the demand for this CPA's expert tax advice to fall. d) no change in the CPA's current supply; instead, future supply will be affected.
B
Alice and Betty's Production Possibilities in one 8-hour day. Refer to Figure 3-10. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade? a) Alice produces more pizzas and Betty produces more lemonade. b) Alice produces more lemonade and Betty produces more pizzas. c) Both Alice and Betty produce only pizzas. d) There are no circumstances under which both Alice and Betty can benefit from specialization and trade.
B
Any point on a country's production possibilities frontier represents a combination of two goods that an economy a) will never be able to produce. b) can produce using all available resources and technology. c) can produce using some portion, but not all, of its resources and technology. d) may be able to produce in the future with more resources and/or superior technology.
B
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Labor Hours Needed to Make 1 Cooler A: 2 I: 1 Radio: A: 5 I: 4 Refer to Table 3-37. Aruba should export a) coolers and import radios. b) radios and import coolers. c) both goods and import neither good. d) neither good and import both goods.
B
At the equilibrium price, the quantity of the good that buyers are willing and able to buy a) is greater than the quantity that sellers are willing and able to sell. b) exactly equals the quantity that sellers are willing and able to sell. c) is less than the quantity that sellers are willing and able to sell. d) Either a) or c) could be correct.
B
Each of the following is a determinant of demand except a) tastes. b) production technology. c) expectations. d) the prices of related goods.
B
Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. Refer to Figure 3-11. If the production possibilities frontier shown is for 240 hours of production, then how long does it take Bonovia to make one pound of cheese? a) 3/5 hour b) 3/4 hour c) 4/3 hours d) 5/3 hours
B
For which of the following goods is the income elasticity of demand likely highest? a) water b) diamonds c) hamburgers d) housing
B
If the quantity demanded of a certain good responds only slightly to a change in the price of the good, then the a) demand for the good is said to be elastic. b) demand for the good is said to be inelastic. c) law of demand does not apply to the good. d) demand curve for the good shifts only slightly in response to a change in price.
B
In economics, capital refers to a) the finances necessary for firms to produce their products. b) buildings and machines used in the production process. c) the money households use to purchase firms' output. d) stocks and bonds.
B
In the simple circular-flow diagram, the participants in the economy are a) firms and government. b) households and firms. c) households and government. d) households, firms, and government.
B
Microeconomics is the study of a) how money affects the economy. b) how individual households and firms make decisions. c) how government affects the economy. d) how the economy as a whole works.
B
Refer to Figure 2-4. This economy cannot produce at which point(s)? Q = ABOVE LINE BUT ON Y AXIS R = ON LINE TOWARDS Y-AXIS S = IN SPACE ABOVE LINE ON GRAPH T = IN SPACE BELOW LINE ON GRAPH U = ON LINE TOWARDS X-AXIS a) Q b) Q, S c) Q, S, T d) S
B
Refer to Figure 2-4. This economy has the ability to produce at which point(s)? Q = ABOVE LINE BUT ON Y AXIS R = ON LINE TOWARDS Y-AXIS S = IN SPACE ABOVE LINE ON GRAPH T = IN SPACE BELOW LINE ON GRAPH U = ON LINE TOWARDS X-AXIS a) Q, R, T, U b) R, T, U c) R, U d) T
B
Refer to Figure 4-10. The movement from Point A to Point B represents a(n) a) shift in the supply curve. b) decrease in the quantity supplied. c) increase in the quantity supplied. d) Both a and b are correct.
B
Refer to Table 4-11. If the price were $4, a a) surplus of 15 units would exist, and price would tend to fall. b) shortage of 25 units would exist, and price would tend to rise. c) surplus of 25 units would exist, and price would tend to fall. d) shortage of 40 units would exist, and price would tend to rise.
B
Refer to Table 4-9. Which combination would produce an increase in equilibrium price and an indeterminate change in equilibrium quantity? a) A b) B c) C d) D
B
Resources are: a) plentiful for households but scarce for economies b) scare for households and scare for economies c) scare for households but plentiful for economies d) plentiful for households and plentiful for economies
B
Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for a) hair gel to increase. b) razors to increase. c) combs to increase. d) shampoo to increase.
B
Table 2-3 Production Possibilities for Footville Shoes Socks 800 0 600 400 400 700 200 900 0 1000 Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600? a) 400 socks b) 300 socks c) 200 socks d) 100 socks
B
Table 3-38 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. Labor Hours Needed to Make 1 Unit of Cheese E: 1 S: 4 Bread E: 4 S: 8 Number of Units Produced in 40 Hours Cheese E: 40 S: 10 Bread E: 10 S:5 Refer to Table 3-38. Spain should export a) cheese and import bread. b) bread and import cheese. c) both goods and import neither good. d) neither good and import both goods.
B
The circular-flow diagram is an example of a) a laboratory experiment. b) an economic model. c) a mathematical model. d) All of the above are correct.
B
The demand for grape-flavored Hubba Bubba bubble gum is likely a) inelastic because there are many close substitutes for grape-flavored Hubba Bubba . b) elastic because there are many close substitutes for grape-flavored Hubba Bubba. c) inelastic because the market is broadly defined. d) elastic because the market is broadly defined.
B
The opportunity cost of an item is a) the number of hours needed to earn money to buy the item. b) what you give up to get that item. c) usually less than the dollar value of the item. d) the dollar value of the item.
B
The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and a) society's preferences. b) the available production technology. c) a fair distribution of the output. d) the available demand for the output.
B
The smaller the price elasticity of demand, the a) more likely the product is a luxury. b) smaller the responsiveness of quantity demanded to a change in price. c) more substitutes the product has. d) greater the responsiveness of quantity demanded to a change in price.
B
When quantity demanded responds strongly to changes in price, demand is said to be a) fluid. b) elastic. c) dynamic. d) highly variable.
B
When the price of an eBook is $15.00, the quantity demanded is 400 eBooks per day. When the price falls to $10.00, the quantity demanded increases to 700. Given this information and using the midpoint method, we know that the demand for eBooks is a) inelastic. b) elastic. c) unit elastic. d) perfectly inelastic.
B
Which of the following changes would not shift the demand curve for a good or service? a) a change in income b) a change in the price of the good or service c) a change in expectations about the future price of the good or service d) a change in the price of a related good or service
B
Which of the following is not a determinant of the price elasticity of demand for a good? a) the time horizon b) the steepness or flatness of the supply curve for the good c) the definition of the market for the good d) the availability of substitutes for the good
B
A company that formerly produced music CDs went out of business because too many potential customers bought illegally-produced copies of the CDs instead of buying the product directly from the company. This instance serves as an example of a) market power. b) inefficient trade. c) inadequate enforcement of property rights. d) the invisible hand at work.
C
A friend of yours asks you why market prices are better than government-determined prices. Because you understand economic principles, you say that market-determined prices are better because they generally reflect a) the value of a good to society, but not the cost of making it. b) the cost of making a good to society, but not its value. c) both the value of a good to society and the cost of making it. d) neither the value of a good to society nor the cost of making it.
C
A production possibilities frontier is a straight line when a) the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b) an economy is interdependent and engaged in trade instead of self-sufficient. c) the rate of tradeoff between the two goods being produced is constant. d) the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
C
Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. Minutes Needed to Make 1 Bushel of Wheat B: 10 T: 6 Pound of Beef B: 12 T: 10 Refer to Table 3-20. What is Theresa's opportunity cost of producing one bushel of wheat? a) 5/6 pound of beef b) 6/5 pound of beef c) 3/5 pound of beef d) 5/3 pounds of beef
C
Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. Minutes Needed to Set Up 1 Computer B: 46 J: 30 Test 1 Computer B: ? J: 40 Number of Computers Set Up or Tested in a 40-Hour Week Computers Set Up B: 50 J: 80 Computers Tested B: 40 J: 60 The number of minutes needed by Barb to test a computer is a) 36. b) 48. c) 60. d) 64.
C
Benefits from trade would not include a) the ability of people and nations to specialize. b) a greater variety of goods and services becoming available. c) less competition. d) lower prices.
C
Chris and Tony's Production Opportunities Tomatoes C: 10 LBS T: 14 LBS Pasta Sauce C: 300 jars T: 280 jars Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following statements is correct? a) Tony has a comparative advantage in the production of sauce. b) Chris has a comparative advantage in the production of tomatoes. c) Tony has an absolute advantage in the production of tomatoes. d) Chris has an absolute advantage in the production of tomatoes.
C
Efficiency is illustrated by a) both the production possibilities frontier and the circular-flow diagram. b) neither the production possibilities frontier nor the circular-flow diagram. c) the production possibilities frontier only. d) the circular-flow diagram only.
C
Figure 3-11The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. Refer to Figure 3-11. If the production possibilities frontier shown is for 240 hours of production, then which of the following combinations of ham and cheese could Bonovia not produce in 240 hours? a) 250 pounds of ham and 120 pounds of cheese b) 200 pounds of ham and 160 pounds of cheese c) 160 pounds of ham and 200 pounds of cheese d) 100 pounds of ham and 240 pounds of cheese
C
If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n) a) increase in the demand for Nooks. b) decrease in the demand for Nooks. c) increase in the demand for Kindles. d) decrease in the demand for Kindles.
C
In the broadest sense, economics is the study of: a) production methods. b) the interaction of business and government. c) how society manages its scarce resources. d) how households decide who performs which tasks.
C
Last year, Joan bought 50 pounds of hamburger when her household's income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. All else constant, Joan's income elasticity of demand for hamburger is a) positive, so Joan considers hamburger to be an inferior good. b) positive, so Joan considers hamburger to be a normal good and a necessity. c) negative, so Joan considers hamburger to be an inferior good. d) negative, so Joan considers hamburger to be a normal good but not a necessity.
C
Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for butter? a) a decrease in the price of butter b) an increase in the price of margarine c) an increase in the price of milk d) an improvement in technology that allows firms to use less labor in the production of butter
C
Refer to Table 4-2. Whose demand does not obey the law of demand? a) Abby's b) Brandi's c) Carrie's d) DeeDee's
C
The adage, "There is no such thing as a free lunch," means: a) the cost of living is always increasing. b) all costs are included in the price of a product. c) people face tradeoffs. d) even people on welfare have to pay for food.
C
Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the a) demand for flour to increase. b) demand for flour to decrease. c) supply of flour to increase. d) supply of flour to decrease.
C
When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is a) 1.50, and an increase in price will result in an increase in total revenue for good A. b) 1.50, and an increase in price will result in a decrease in total revenue for good A. c) 0.67, and an increase in price will result in an increase in total revenue for good A. d) 0.67, and an increase in price will result in a decrease in total revenue for good A.
C
When we move along a given demand curve, a) only price is held constant. b) income and price are held constant. c) all nonprice determinants of demand are held constant. d) all determinants of quantity demanded are held constant.
C
You go to the movieplex where movies ordinarily cost $9. You are intending to see a movie for which you have a $3 off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost? a) the amount you value the first movie + $3 b) the amount you value the first movie + $9 c) $3 d) $9
C
A competitive market is a market in which a) an auctioneer helps set prices and arrange sales. b) there are only a few sellers. c) the forces of supply and demand do not apply. d) no individual buyer or seller has any significant impact on the market price.
D
A rationale for government involvement in a market economy is a) markets sometimes fail to produce a fair distribution of economic well-being. b) markets sometimes fail to produce an efficient allocation of resources. c) property rights have to be enforced. d) All of the above are correct.
D
Chris and Tony's Production Opportunities Tomatoes C: 10 LBS T: 14 LBS Pasta Sauce C: 300 jars T: 280 jars Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following prices would result in a mutually advantageous trade between Chris and Tony? a) 1 lb. of tomatoes for 23 jars of sauce b) 1 lb. of tomatoes for 27 jars of sauce c) 1 lb. of tomatoes for 33 jars of sauce d) .Both a and b are correct.
D
In a certain economy, jam and bread are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more jam and more bread, relative to the quantities of those goods that are being produced now? a) Unemployed labor is put to work producing jam and bread. b) The economy puts its idle capital to work producing jam and bread. c) The economy experiences economic growth. d) All of the above are correct.
D
In a market economy, economic activity is guided by a) the government. b) public-interest groups. c) central planners. d) self-interest and prices.
D
In the case of perfectly inelastic demand, a) the change in quantity demanded equals the change in price. b) the percentage change in quantity demanded equals the percentage change in price. c) infinitely-large changes in quantity demanded result from very small changes in the price. d) quantity demanded stays the same whenever price changes.
D
In the circular-flow diagram, which of the following items does not flow from households to firms? a) revenue b) land, labor, and capital c) factors of production d) profit
D
In which of the following situations will total revenue increase? a) Price elasticity of demand is 1.2, and the price of the good decreases. b) Price elasticity of demand is 0.5, and the price of the good increases. c) Price elasticity of demand is 3.0, and the price of the good decreases. d) All of the above are correct.
D
John is an athlete. He has $120 to spend and wants to buy either a heart rate monitor or new running shoes. Both the heart rate monitor and running shoes cost $120, so he can only buy one. This illustrates the principle that a) people respond to incentives. b) rational people think at the margin. c) trade can make everyone better off. d) people face trade-offs.
D
On a bowed production possibilities frontier, as you move down along the curve a) more of one good must be given up to receive one unit of the other good. b) the available production technology does not change. c) the opportunity cost increases. d) All of the above are correct.
D
One advantage market economies have over centrally-planned economies is that market economies a) provide an equal distribution of goods and services to households. b) establish a significant role for government in the allocation of resources. c) solve the problem of scarcity. d) are more efficient.
D
People are likely to respond to a policy change a) only if they think the policy is a good one. b) only if the policy change changes the costs of their behavior. c) only if the policy change changes the benefits of their behavior. d) if the policy changes either the costs or benefits of their behavior.
D
Rational people make decisions at the margin by a) following marginal traditions. b) behaving in a random fashion. c) thinking in black-and-white terms. d) comparing marginal costs and marginal benefits.
D
Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n) a) decrease in demand. b) increase in demand. c) decrease in quantity demanded. d) increase in quantity demanded.
D
Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur? a) a movement along D2 from point A to point B b) a movement along D2 from point B to point A c) a shift from D1 to D2 d) a shift from D2 to D1
D
The principle that "trade can make everyone better off" applies to interactions and trade between a) families. b) states within the United States. c) nations. d) All of the above are correct.
D
The production possibilities frontier illustrates a) the trade-off between efficiency and equality. b) the combination of output that an economy should produce. c) the combination of output that each member of society should consume. d) None of the above is correct.
D
When can two countries gain from trading two goods? a) when the first country can only produce the first good and the second country can only produce the second good b) when the first country can produce both goods, but can only produce the second good at great cost, and the second country can produce both goods, but can only produce the first good at great cost c) when the first country is better at producing both goods and the second country is worse at producing both goods d) Two countries could gain from trading two goods under all of the above conditions.
D
When supply and demand both increase, equilibrium a) price will increase. b) price will decrease. c) quantity may increase, decrease, or remain unchanged. d) price may increase, decrease, or remain unchanged.
D
Which of the following events would cause a movement upward and to the right along the supply curve for mangos? a) The number of sellers of mangos increases. b) There is an advance in technology that reduces the cost of producing mangos. c) The price of fertilizer decreases, and fertilizer is an input in the production of mangos. d) The price of mangos rises.
D
Which of the following is not an assumption of the productions possibilities frontier? a) A country produces only two goods or types of goods. b) Technology does not change. c) The amount of available resources does not change. d) There is a fixed quantity of money.
D
Which of the following is not correct? a) The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good. b) The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X. c) The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good. d) The gains from specialization and trade are based not on comparative advantage but on absolute advantage.
D
Which of the following statements about the consumers' responses to rising gasoline prices is correct? a) Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run. b) Consumers react to a 10% increase in price with about a 10% decrease in quantity demanded in both the short run and long run. c) Consumers decrease their quantity demanded more in the short run than in the long run. d) Consumers decrease their quantity demanded more in the long run than in the short run.
D
Which of the following statements is not correct? a) Trade allows for specialization. b) Trade has the potential to benefit all nations. c) Trade allows nations to consume outside of their production possibilities curves. d) Absolute advantage is the driving force of specialization.
D
Which of these statements about economic models is correct? a) For economists, economic models provide insights about the world. b) Economic models are built with assumptions. c) Economic models are often composed of equations and diagrams. d) All of the above are correct.
D
tudying which of the following is helpful in learning to think like an economist? a) theory. b) case studies. c) examples of economics in the news. d) all of the above.
D
