myeconlab ch 1-8

The following table shows the hourly output per worker measured as quarts of olive oil and pounds of pasta in Greece and​ Italy: Output per Hour of Work Olive Oil Pasta Greece 2 1 Italy 3 6 The opportunity cost of producing one more quart of olive oil in Greece is _____ pounds of pasta. ​(Enter your response rounded to two decimal​ places.) The opportunity cost of producing one more quart of olive oil in Italy is _____pounds of pasta. ​(Enter your response rounded to two decimal​ places.) The opportunity cost of producing one more pound of pasta in Greece is ______ quarts of olive oil. ​(Enter your response rounded to two decimal​ places.) The opportunity cost of producing one more pound of pasta in Italy is ______ quarts of olive oil. ​(Enter your response rounded to two decimal​ places.)

.5, 2, 2, .5

Suppose a bond makes ​$100 coupon payments at the end of the next two​ years, at which time the face value of ​$1,000 is repaid. If the interest rate is 44 ​percent, then what is the present value of the​ bond?

1113.17

Suppose a bond makes ​$80 coupon payments at the end of the next two​ years, at which time the face value of ​1,000 is repaid. If the interest rate is 2 ​percent, then what is the present value of the​ bond? The present value​ (PV) of the bond is ​______

1116.49

Suppose Italy and Portugal produce only cloth and wine. Assume that each country uses only labor to produce each​ good, and that the cloth and wine made in Italy and Portugal are exactly alike. The table below shows how much each country can produce of each good with one hour of​ labor: Cloth Wine Italy 24 14 Portugal 3 8 suppose that italy and portugal do not trade with each other. each has 2000 hours of labor with which to produce cloth and wine, and the countries are currently producing amounts of each good shown in the table below CLoth Wine Italy 43200 2800 Portugal 2800 8533 If italy trades 2800 units of cloth for 2800 units of wine w P then with trade italy will be able to onsume the same amount of wine and _____ additional units of cloth and portugal will be able to consume the same amount of cloth and ______ additional units of wine .

200 4667

What was the present value of​ Hamilton's contract at the time he signed it​ (assuming an interest rate of 20 ​percent)? For​ simplicity, ignore the​ $2 million given to charity. ​$_______ million. ​(Enter your response rounded to two decimal​ places.) If you use an interest rate of 1818 ​percent, what was the present value of​ Hamilton's contract? ​$______ million. ​(Enter your response rounded to two decimal​ places.)

72.75, 76.07

New Wings is a global wind power company. It recently declared results which were much lower than street expectations. Leading research houses changed the rating of the​ company's stock from a​ "buy" to a​ "sell." Despite​ this, the​ company's stock price appreciated outperforming the benchmark indices. Which of the​ following, if​ true, would best explain​ this? A. The government announced new tax breaks for companies in the alternative energy business. B. Crude oil prices fell substantially during the period. C. The​ company's bond yields increased substantially. D. Some other energy companies also returned unimpressive profit numbers for the quarter. E. The CEO sold 5 percent of his entire personal holding in the company to finance a private purchase.

A

Steel producers in the United States observe that foreign sales of U.S. steel have drastically declined due to stringent trade policies adopted by foreign governments. The lobbying efforts of U.S. steel manufacturers induced the domestic government to introduce a tax on the import of steel and help stimulate the domestic sales of​ locally-produced steel. Which of the following examples describes a similar government​ policy? A. A tariff introduced by the Mexican government on tobacco imports from Brazil in retaliation for unfair treatment of Mexican tobacco exports to Brazil. B. A tariff imposed by the Sri Lankan government on the import of cotton textiles from China in order to protect domestic producers from foreign competition. C. A production subsidy provided by the South African government to stimulate domestic production of a​ high-technology good with positive spillover effects. D. A production subsidy provided by the Indian government to an industry that generates substantial employment opportunities. E. A tariff applied on toy imports from China in reaction to incidents that certain Chinese firms were unable to meet international safety standards.

A

The government of a country faced substantial pressure from different sectors to reduce tariffs. Many​ groups, including the​ media, were lobbying for an overall reduction in import tariffs imposed by the government. According to​ them, the country would gain if free trade were encouraged. While certain sectors reported increased exports after a reduction in trade​ restrictions, many firms went out of business in other sectors as imports increased. People who lost their jobs complained that the reduction in tariffs had done the nation more harm than good. Which of the​ following, if​ true, would weaken the claim of the people who lost their​ jobs? A. The demand for the​ country's goods is higher outside the country than inside the country. B. The World Trade Organization is encouraging free trade between nations. C. The increase in GDP after the reduction in trade barriers was very low. D. The contribution of imports to this​ country's GDP has always been much higher than its exports. E. The global economy is recovering from a recession.

A

The​ Sarbanes-Oxley Act was passed A. to promote management accountability in corporations. B. to make the U.S. economy more competitive. C. to decrease insider trading in stocks. D. to increase the administrative costs of corporations.

A

Which of the following describes the extent of international trade in the U.S.​ economy? A. About 66 percent of U.S. manufacturing industries depend on exports for at least 10 percent of jobsAbout 66 percent of U.S. manufacturing industries depend on exports for at least 10 percent of jobs. B. Since​ 1950, U.S. imports have increased from less than 5 percent of GDP to about 3030 percent in 2008. C. Each​ year, the U.S. exports less than 10 percent of many agricultural crops such as ricerice. D. Since​ 1950, U.S. exports have decreased from about 11 percent of GDP to about 4 percent in 2008. E. Since​ 1950, U.S. exports have decreaseddecreased and U.S. imports have increasedincreased.

A

Which of the following are examples of activities that generate externalities in the market for health​ care? ​(Check all that​ apply.) A. People receiving vaccinations against infectious diseases. B. Technological advances yielding better medical equipment. C. Individuals engaging in injurious or reckless lifestyle choices. D.Medical schools maintaining strict standards.

A and C

Which of the following statements is true about the health of people in the United States during the past 150​ years?

A. Life expectancy has more than doubled. B. Infant mortality has decreased. C. The average person has become taller. ===-all of the above

​_____ is a situation in which a country does not trade with other countries. The​ _____ is the ratio at which a country can trade its exports for imports from other countries.

Autarky, terms of trade

Briefly explain whether you agree or disagree with the following​ statement: ​"International trade is more important to the U.S. economy than to most other​ economies." A. Agree. The U.S. economy relies on low priced imports to keep inflation under control. B. Disagree. Exports and imports are a relatively small fraction of the United States GDP. C. Disagree. Since the U.S. has an absolute advantage in the production of most​ goods, it​ doesn't gain from trade. D. Agree. The U.S. is the largest exporter of goods and services in the world

B

Country Y exports a good to country X where it is sold at​ $15 per unit. The same good is sold in the home market at​ $17 per unit and in another market at a higher price still. Industry experts in country X claim that the good is being dumped and the government should intervene and protect the domestic industry. Which of the​ following, if​ true, would weaken the argument that dumping has​ occurred? A. The cost of producing this good in the exporting country is very high. B. The demand for the good is much more elastic in country X than in the home country. C. The availability of substitutes in country X is very low. D. There is no difference in the quality of resources available in the two countries. E. Many other countries have recently been accused of dumping.

B

Some politicians argue that eliminating U.S. tariffs and quotas would help the U.S. economy only if other countries eliminated their tariffs and quotas in exchange. A. This statement is​ true; the U.S. economy would gain from the elimination of tariffs and quotas but only if other countries also reduce their tariffs and quotas so our industries are able to penetrate their markets. B. This statement is​ false; the U.S. economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas. C. This is statement​ true; the U.S. economy would not gain from the elimination of tariffs and quotas especially if other countries do not reduce their tariffs and quotas. D. This statement is false because the U.S. economy is so large that it is not affected by the reduction of tariffs and quotas.

B

The U.S. economy would experience a gain in economic surplus from the elimination of tariffs and quotas only if other countries also reduced their tariffs and quotas. A. True B. False

B

A(n) ​ _____ is a financial security that represents partial ownership of a​ firm, while a​ _____ is a financial security that represents a promise to repay a fixed amount of funds. A. ​stock, dividend B. ​bond, stock C. ​stock, bond D. interest​ payment, stock

C

Comparative advantage A. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a higher absolute cost than competitors. B. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower absolute cost than competitors. C. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors. D. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a higher opportunity cost than competitors.

C

Some newspaper reports described Hamilton as having signed a​ $125 million contract with the Angels. Was the value of this contract equal to​ $125 million cash in hand in​ 2013? A. ​Yes, the tax benefits of the charity payment allow the​ $125 million to be considered present value. B. ​No, because the payments are made at the end instead of the beginning of each year. C. ​No, because​ $125 million is the sum of payments over the​ years, not the present value of the payments. D. ​Yes, because​ $125 million is the total amount that will be paid out.

C

Output per hour of work Hats Beer Chile 10 4 Argentina 1 2 a. _______has an absolute advantage in the production of​ hats, and __________as an absolute advantage in the production of beer. b. _________has a comparative advantage in the production of​ hats, and __________has a comparative advantage in the production of beer.

Chile, Chile Chile, Argentina

An income statement shows a​ firm's A. costs. B. profits. C. revenues. D. all of the above.

D

Ronald Dickson and Louis Banks have come up with a new idea to leverage social media for improving business productivity. The​ would-be founders are debating the form of ownership that their company should take. Ronald is in favor of​ partnership, while Louis favors the corporate form of business. Which of the​ following, if​ true, would strengthen the argument in favor of setting it up as a​ corporation? A. They expect to hire at least 10 people in the first few months of operations. B. In the interest of protecting their intellectual property they would not like any information about their company in the public domain. C. Reducing tax liability is a high priority for them. D. The business idea is beyond the scope of their existing resources. E. Corporations generally are larger than sole proprietorships and partnerships.

D

The​ Sarbanes-Oxley Act A. requires that directors of corporations be certified public accountants. B. reduces penalties for management irresponsibility. C. prohibits interlocking directorates of corporations. D. requires that CEOs of corporations certify the accuracy of financial statements.

D

The​ principal-agent problem occurs when:: A. the principal gives an agent conflicting objectives which the agent is unable to fulfill. B. a​ firm's shareholders fulfill their own interest rather than the interests of top management. C. an agent pursues his​ principal's interests rather than his own interests. D. an agent pursues his own interests rather than the interests of the principal who hired him.

D

Which of the following factors may explain why a country like the Netherlands is more likely to import and export larger fractions of its GDP than would a larger​ country, such as China or the United​ States? A. The Netherlands must rely on imports for a large range of products. B. Given its small​ size, the Netherlands must specialize in producing and exporting only a few​ products; it cannot produce the wide range of products that China or the U.S. can produce. C. The Netherlands is a small country with a level of GDP that is only a small fraction of that of China or the U.S. D. All of the above.

D

Why do some people oppose the World Trade Organization​ (WTO)? A. Some opponents are specifically against the globalization process that began in the 1980s and became widespread in the 1990s. B. Some critics of the WTO support globalization in principle but believe that the WTO favors the interests of the​ high-income countries at the expense of the​ low-income countries. C. Some opponents desire to erect trade barriers to protect domestic firms from foreign competition. D. All of the above.

D

Why do some people oppose the World Trade Organization​ (WTO)? A. Some opponents desire to erect trade barriers to protect domestic firms from foreign competition. B. Some opponents are specifically against the globalization process that began in the 1980s and became widespread in the 1990s. C. Some critics of the WTO support globalization in principle but believe that the WTO favors the interests of the​ high-income countries at the expense of the​ low-income countries. D. All of the above.

D

What were the economic effects of the North American Free Trade Agreement​ (NAFTA)? a. US exports of motor vehicles to Mexico decreased. B. the wages for both U.S. and Mexican workers decreased. C.Consumption increased in the United States but decreased in Canada. D. Employment in the US increased by as much as 21 million jobs.

D.

Comparative advantage A. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a higher absolute cost than competitors. B. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower absolute cost than competitors. C. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors. D. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a higher opportunity cost than competitors. E.While Shillong produces bigger loaves of bread than​ Safi, chocolate bars produced in Safi are bigger than those in Shillong.

E

The government of a country faced substantial pressure from different sectors to reduce tariffs. Many​ groups, including the​ media, were lobbying for an overall reduction in import tariffs imposed by the government. According to​ them, the country would gain if free trade were encouraged. While certain sectors reported increased exports after a reduction in trade​ restrictions, many firms went out of business in other sectors as imports increased. People who lost their jobs complained that the reduction in tariffs had done the nation more harm than good. Which of the​ following, if​ true, would weaken the claim of the people who lost their​ jobs? A. The global economy is recovering from a recession. B. The contribution of imports to this​ country's GDP has always been much higher than its exports. C. The increase in GDP after the reduction in trade barriers was very low. D. The World Trade Organization is encouraging free trade between nations. E. The demand for the​ country's goods is higher outside the country than inside the country

E

As long as countries only produce goods in which they have a comparative advantage and trade those goods for ones in which they do not have a comparative​ advantage, everyone gains and no one loses as a result of international trade. True or false

False

By​ 2000, large Wall Street investment banks had all converted from corporations to partnerships. This conversion is a key reason that the investment banks chose to take on significant risk by originating risky​ mortgage-backed securities. true or false

False

Suppose that Chile and Argentina currently do not trade with each other. Each has​ 1,000 hours of labor to use for producing hats and​ beer, and the countries are currently producing the amounts of each good shown in the table below. Using this​ information, give a numerical example of how Chile and Argentina can both gain from trade. Assume that after trading​ begins, one hat can be exchanged for one barrel of beer. Hats Beer Chile 8000 800 Argentina 800 400 Amount of hats and beer after trading for each country? Hats Beer Chile _______ 800 Argentina 800 _______

Hats Beer Chile ___9200____ 800 Argentina 800 ___1200____

Zambezi and Zoravia are two developing countries with similar populations. The governments of these countries had adopted a similar health care plan about ten years ago and spend about the same dollar amounts on annual health care. When the health care plan was first​ adopted, the life expectancy of the people of both these countries was approximately 50 years.​ However, after ten​ years, Zambezi showed a much higher average life expectancy compared to Zoravia. Which of the​ following, had it happened during this​ period, would help explain this​ outcome?

Zambezi has been more effective at reducing unnecessary health care spending.

The​ "lemons problem" refers to the observation that the presence of asymmetric information in the used car market leads to the problem of ________, causing the cars offered for sale to be predominantly ________ in quality. In the case of health​ insurance, a lemons problem exists since those more likely to want health insurance are __________ people.

adverse selection, poor, sick

An externality: A. interferes with the economic efficiency of a market equilibrium. B. refers to a benefit or cost of an economic activity that affects someone who is not directly associated with it. C. may require government intervention.

all of the above

By​ trading, countries are able to consume more than they could without trade. This outcome is possible because:: A. world production of both goods increases after trade. B. shifting production to the more efficient country—the one with the comparative advantag—increases total production. C. inefficiencies in resource allocation are reduced. D. all of the above.

all of the above

The overall mortality rate in the United States decreased by more than 25 percent between 1981 and 2009. Which of the following is not a cause of this​ decline? The decline in the mortality rate is due to all of the following except a decline in deaths due to

diabetes

_____are goods and services produced domestically but sold to other countries. __________ are goods and services bought domestically but produced in other countries. ___________are taxes imposed by a government on imports of a good into a country.

exports, imports, tariffs,

An economic analysis of a proposal to impose a quota LOADING... on steel imports LOADING... into the United States indicated that the quota would save​ 3,700 jobs in the steel industry but cost about​ 35,000 jobs in other U.S. industries. A quota on steel imports would cause employment to fall in other industries because what happens to the costs of producing goods that use​ steel? ​Source: Study cited in Douglas A.​ Irwin, Free Trade Under Fire​, ​Princeton, NJ: Princeton University​ Press, 2002, p. 82. The quota _______ the costs of producing goods that use steel.

raises