Surveys of consumers regarding labor standards indicate that they are willing to pay:
a. a large amount for a large improvement in working conditions.
b. a small amount for a large improvement in working conditions.
c. nothing for a large improvement in working conditions.
d. a small amount for a small decline in working conditions.
Answer: b. a small amount for a large improvement in working conditions.
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In equilibrium, all traded goods sell at the same price internationally because of
a) government intervention B) arbitrage C) the fact that the underlying value is the same everywhere D) none of the above
Pamela's bakery produces 500 loaves of bread in a given year. Pamela pays $100 for flour and yeast, pays $600 in wages, pays $50 in interest on an existing loan, and pays $100 in taxes to the government
One of Pamela's bread slicing machines, which cost $75 each, wears out over the course of the year and must be scrapped. Pamela's profit for the year equals $75. Pamela's bread, therefore, sells for A) $0.50 per loaf. B) $1.00 per loaf. C) $2.00 per loaf. D) cannot tell, insufficient information