Which of the following statements about comparative advantage is not true?
a. Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources.
b. The principle of comparative advantage applies to countries as well as to individuals.
c. Economists use the principle of comparative advantage to emphasize the potential benefits of free trade.
d. A country may have a comparative advantage in producing a good, even though it lacks an absolute advantage in producing that good.
a
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When there is a decrease in the unemployment rate,
A. The economy moves closer to the production possibilities curve. B. There is a movement along the production possibilities curve. C. The production possibilities curve shifts inward. D. The production possibilities curve shifts outward.
Banks that suffered significant losses in the 1980s made the mistake of
A) holding too many liquid assets. B) minimizing default risk. C) failing to diversify their loan portfolio. D) holding only safe securities.
Which of these changes is likely to follow when the Fed purchases U.S. government securities? a. Aggregate demand will decrease
b. The demand for financial securities will increase. c. Rate of interest will increase. d. Planned investment spending will increase. e. Real GDP will decrease.
Which of the following both reduce net exports?
a. exports rise, imports rise b. exports rise, imports fall c. exports fall, imports rise d. exports fall, imports fall