The terms of trade refer to:
A) rules and regulations that govern trade between nations.
B) product of the opportunity cost of producing the same good in two trading nations.
C) exchange rate of goods for goods.
D) amount of money that has to be given up to import an additional quantity of a good.
C
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A logical explanation for recessions might be that households have suddenly altered their willingness to work. A problem with this explanation is
a. it is inconsistent with patterns of job searches during recessions b. the demand for labor rarely shifts c. the large number of women who entered the labor force in the last four decades d. it is inconsistent with the classical model e. the work ethic that is responsible for the decline in American vacations
Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an
airplane for $6,000 . pays $1,300 for fuel and maintenance, and hires one worker for $30,000 . Sam's total revenue from pilot training classes this year equaled $90,400 . How did Sam's business do this year? a. Sam realized an economic profit of $3,400 this year. b. Sam realized an economic loss of $3,400 this year. c. Sam realized an economic profit of $5,800 this year. d. Sam realized an economic profit of $3,800 this year. e. Sam realized an economic loss of $3,800 this year.