Which of the following statements is true?
A) As the rental prices of downtown apartments rise, only workers with the lowest opportunity cost of time will be willing to rent them.
B) As the rental prices of downtown apartments rise, only workers with the highest opportunity cost of time will be willing to rent them.
C) Optimizers with the lowest opportunity cost of time push up the rental price of apartments with the lowest commute time.
D) Optimizers with the highest opportunity cost of time push up the rental price of apartments with the highest commute time.
B
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The graphs above show the production possibilities curves for the U.S. and Canada, which both produce cars and wheat. Determine comparative advantage for each country, and then draw the CPC for each country, assuming that the world price of cars is 1.5 wheat. (Assume that wheat is measured in thousands of bushels.) How would the gains from trade change if the price of cars rose to 1.75 wheat?
What will be an ideal response?
According to Figure 6.1:
A. soup is a normal good.
B. soup is an inferior good.
C. soup is a Giffen good.
D. bread is an inferior good.