During World War II, the price of rubber went up considerably. The rise in price stimulated research for alternatives.

During World War II, the price of rubber went up considerably. The rise in price stimulated research for alternatives. For example, today’s automobile tires are almost entirely made from synthetic materials. As a result, the increase in the price of rubber eventually led to a very large drop in quantity demanded. This is an example of how the price elasticity of demand: A) falls the less specifically the good is defined. B) rises the less specifically the good is defined. C) falls the greater the time frame considered. D) rises the greater the time frame considered.Which of the following most likely correctly orders goods from those with the highest price elasticity of demand to those with the least price elasticity of demand? A) Cars, motor transportation, transportation. B) Transportation, bicycles, non-motor transportation. C) Brand-name Advil, pain-relieving medicine, aspirin. D) Pain-relieving medicine, brand-name Advil, aspirin.Rent-seeking activities: A) require resources, and the net result is to reduce total welfare to society. B) require resources, but the net result is to increase total welfare to society. C) do not require resources. D) have no effect on society’s welfare.When supply is inelastic, consumers face: A) insignificant price increases when demand increases. B) insignificant price decreases when demand increases. C) significant price decreases when demand increases. D) significant price increases when demand increasesAs a country develops economically, what changes usually take place in the goods it exports? A) There is little change because comparative advantage does not change. B) Raw materials and agricultural products decline in importance and are replaced by services and manufactured goods. C) Services and manufactured goods decline in importance and are replaced by raw materials and agricultural products. D) Exports go from being diversified to being specialized in whatever the country finds to be its comparative advantage.Why are the gains from trade often difficult to recognize? A) The United States does not keep accurate records of employment. B) The gains are spread out over a wide variety of goods and consumers. C) There are no gains from trade. D) The gains are in services, which are difficult to measure.The decline in the price of American goods is in part due to: A) agglomeration effects of firms. B) declines in productivity. C) trade barriers that allow domestic firms to lower prices. D) globalization and increased trade.How are goods manufactured in other countries creating jobs in the United States? A) People whose jobs were outsourced are now discouraged workers. B) U.S. firms are specializing in managing the trade of these goods. C) Foreign countries are importing U.S. natural resources. D) People who have lost jobs have more time to shop and therefore increase demand for goods.Trade adjustment assistance is: A) difficult to implement because the adjustment costs of international trade are generally greater than the gains from trade. B) difficult to implement because claims of injury are easy to make and may be politically difficult to reject. C) easy to implement because the adjustment costs of international trade are typically less than the gains from trade. D) easy to implement because it is easy to identify the few industries genuinely injured by international trade.When the U.S. imposed restrictions on imported steel in the 1950s and 1960s, the U.S. steel industry responded by: A) raising prices and investing more in steel production. B) raising prices and channeling profits from their steel production into other activities. C) lowering prices and investing more in steel production. D) lowering prices and channeling profits from their steel production into other activities.A Big Mac meal costs $3.00 and gives you an additional 5 units of utility; a meal at the Four Season’s Hotel costs $27.00 and gives you an additional 45 units of utility. Based only on the information you have, using the theory of rational choice you would most likely: A) choose to eat the Big Mac meal. B) choose to eat at the Four Season’s Hotel. C) would be indifferent between eating the Big Mac and eating at the Four Season’s Hotel. D) will decide that eating at the Four Season’s Hotel is preferable because though the marginal utilities of both meals are the same, the total utility is greater in the case of the meal at the Four Season’s Hotel.Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so that all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. It will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing output beyond 60 deliveries per day: A) cannot be calculated without knowing Owen’s total fixed costs. B) is $75. C) is $5. D) is $0 since Owen does not have to purchase another van.Globalization has made economies of scope: A) more important to firms because global corporations can segment the production process. B) more important to firms because global corporations do not have to segment the production process. C) less important to firms because global corporations can segment the production process. D) less important to firms because global corporations do not have to segment the production process.

 
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