A normal good is a good for which demand increases as:
a. the income of consumers increases.
b. its own price increases.
c. the price of close substitutes decreases.
d. the total number of consumers increases.
e. a reflection of changing consumer tastes.
a
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It may be unrealistic to assume that consumer tastes are the same across nations and invariant with respect to income:
A. so it is not one of the HO assumptions. B. but it is an HO assumption because it enables the analysis to focus on other issues that drive trade and prices. C. but it actually is true so it is an HO assumption. D. and it is not an HO assumption because consumer tastes within a nation are not relevant to international trade.
Consider an economy where the only goods traded are coconuts and pineapples. Last year, 100 coconuts were sold at €1 apiece, and 200 pineapples were sold at €2.50 apiece. If the money supply was €100, what was velocity?
A. 30 B. 15 C. 6 D. 5