Which of the following features is included in the NAFTA Agreement?
I. a common tariff structure adopted by Canada, Mexico, and the United States
II. elimination of tariffs on trade among Canada, Mexico, and the United States
III. free mobility of labor and capital among Canada, Mexico, and the United States
a. I
b. II
c. III
d. I, II, and III
Ans: b. II
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A consumer's utility function is given by: U(x,y) = 10xy
Currently, the prices of goods x and y are $3 and $5, respectively, and the consumer's income is $150. a. Find the MRS for this consumer for any given bundle (x,y). b. Find the optimal consumption bundle for this consumer. c. Suppose the price of good x doubles. How much income is required so that the consumer is able to purchase the original consumption bundle (if you were unable to solve d., then take a guess at what the optimal bundle is before solving this) d. Now that the price of good x has doubled, how much income is needed for the consumer to reach the original level of utility? Is this more or less that what you found in e.?
Sharply rising oil prices are most likely to lead to a
A. Negative demand shock B. Positive demand shock C. Negative supply shock D. Positive supply shock