4)    How are the fundamental economic decisions determined in Cuba?

a.   Primarily, the government decides because Cuba is a centrally planned economy.

b.     These decisions are made by the country’s elders who have had much experi- ence in answering these questions.

c.    Individuals, firms, and the government interact in a market to make these economic decisions.

d.     The United Nations decides because Cuba is a developing economy.

5)            Which of the following correctly describes the relationship between economic efficiency and economic equity?

a.   They are both automatically achieved in a free market economy. b.          There is no conflict between the two goals.

c.    There is often a trade-off between the two. d.      They always call for opposite outcomes.

Final Examination

6)    Which of the following statements best characterizes the disagreements be- tween Paul Samuelson and Jagdish Bhagwati in their debate about outsourc- ing?

a.   Their disagreements are grounded in normative economic analysis. They dis- agree over how to interpret the relevant economic statistics.

b.     Their disagreements are grounded in positive economic analysis. They dis- agree about the relevant economic statistics used in the model.

c.    Their disagreements are grounded in normative economic analysis. They dis- agree over the types of jobs lost to outsourcing.

d.     Their disagreements are grounded in positive economic analysis. They dis- agree about the model and the assumptions used in the model.