Larger countries will trade more with one another; this is empirically supported by:
a. the intra-industry trade.
b. the increasing returns to scale.
c. the gravity equation.
d. the comparative advantage.
Ans: c. the gravity equation.
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For every choice a person makes it can be assumed that
A) the chooser has full knowledge of the situation. B) some opportunity cost was involved. C) there is a fifty-fifty chance the choice was the wrong one. D) a good is involved and satisfaction is gained.
If the demand for a product remains the same and the supply falls,
A) the market clearing price will fall and the equilibrium quantity will rise. B) the market clearing price will rise and the equilibrium quantity will fall. C) both the market clearing price and the equilibrium quantity will fall. D) both the market clearing price and the equilibrium quantity will rise.