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1. According to the principle of comparative advantage, trade between two countries will benefit:
A. neither country
B. the country with lower production costs
C. the country with higher production costs
D. both countries
2. A detriment to economic growth:
A. is greater spending by corporations on training
B. greater spending by corporations on research and development
C. low saving rates
D. investment in capital
Capital mobility is fairly low, so the Fe curve is less shallowly sloped than the LM curve. The currency floats. What will happen if the country pursues than the LM curve. The currency floats. What will happen if the country pursues an expansionary f..
By itself, the substitution effect of an increase in the wage rate will
A) Jim consumes two goods X and Y. His utility function is as follows: U (X,Y) = 2XY. For Px = $4, Py = $1, and a total budget of $40, find the amount of X and Y that maximize Jim’s utility. Find the corresponding level of utility. In a graph constru..
Crowding out in the loanable fund: what does it mean? Please define: stock, bond, dividend, risk free investment. What are the functions of money? What is the difference between fiat money and commodity money?
Arthur spends his income on pie and whipped cream. He views pie as a good but is neutral about cream, in that he doesn’t care if he consumes it or not. Sofia, on the other hand, will consume pie only with whipped cream. Using diagrams and appropriate..
Your employer has anticipated needing $60,000 in 2.5 years to finance the purchase of a new machine. IF they aniticipate making a single lump sum investment today into a saving account that will return12% interest compounded continuously, how much mo..
A business is generating $1000 a month for the next 5 years at a nominal interest rate of 12% compounded monthly. How much cash should one pay for it?
Describe the relevant criteria that the Australian Bureau of Statistics use to determine whether a person is ‘unemployed' and what problems do you see using this measure?
If the market demand curve is Q = 100-p, what is the market price elasticity of demand? If the supply curve of individual firm is q = p and there are 50 identical firms in the market, draw the residual demand facing any one firm. What is the residual..
Describe three major shifts in the scope of the federal government’s power that occurred between the Civil War and the present.
Suppose that there are two goods, apples and oranges, and two individuals, John and Mike. John has four apples and two oranges, and Mike also has four apples and two oranges. We will call this “point A.” Define what it means for an allocation of good..
Average spending is $2,560. Those with a family history of cancer (4% of the population) spend $40,000 on average, and those with no family history (96% of the population) spend $1,000. Which of the following statements are true? You buy insurance be..
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