Trade creates value by
a. moving goods from people who value the goods less to people who value the goods more.
b. permitting trading partners to expand output through specialization in areas where they each have a comparative advantage.
c. permitting trading partners to expand output through the adoption of mass production methods.
d. all of the above.
D
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If you are willing to sell your lawn mower business for $355,00 . and someone offers you $420,00 . for it, this transaction will generate:
a. There is no surplus created b. $65,00 . worth of seller surplus and unknown amount of buyer surplus c. $30,00 . worth of buyer surplus and $35,00 . of seller surplus d. $65,00 . worth of buyer surplus and unknown amount of seller surplus
Suppose a tax cut affects aggregate demand and aggregate supply. Which of the shifts raise real GDP?
a. both the shift of aggregate demand and the shift of aggregate supply b. the shift of aggregate demand, but not the shift of aggregate supply c. the shift of aggregate supply, but not the shift of aggregate demand d. neither the shift of aggregate demand nor the shift of aggregate supply