Answer the following statements true (T) or false (F)
1) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. Beta would prefer terms of trade at, or close to, 1X = 1½Y.
2) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. If Alpha had produced 20X and 30Y and Beta had produced 30X and 20Y before specialization and trade, then we can say that the gains from specialization and trade are 10X and 10Y.
3) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X. By devoting all its resources to Y, Alpha can produce 30Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. There is no basis for trade between Alpha and Beta because Beta has an absolute advantage in the production of both goods.
4) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X. By devoting all its resources to Y, Alpha can produce 30Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the given information. Alpha would prefer terms of trade at, or close to, 1X = 2 / 3 Y.
1) T
2) T
3) F
4) T
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Assume the current price of good X is too high, i.e., it is above the equilibrium price. Describe the changes that would occur in a market as a result, i.e., explain how the market would adjust to equilibrium
What will be an ideal response?
Answer the following statements true (T) or false (F)
1. When you use money to purchase groceries, money is functioning as a store of value. 2. Money performs its function as a store of value very well, because it protects one against the erosion of purchasing power from inflation. 3. With token money, the face value is greater than the intrinsic value. 4. The M1 money supply is composed of currency, checkable deposits, and savings deposits. 5. Credit card balances are part of money supply M2.