"Most textiles worn by American consumers are produced in Asian and South American countries where the opportunity costs of production are lower." This observation refers to the:
a. law of supply.
b. income elasticity of demand.
c. principle of beneficial tariffs.
d. principle of comparative advantage.
e. law of decreasing returns to scale.
d
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Governments track the value of international transactions with ________.
A. the circular flow model B. aggregate demand C. the balance of trade D. the federal deficit
The short-run and long-run aggregate supply curves remain stable, and a decrease in aggregate demand occurs. What is the result in the short run?
A) A period of recession and a rise in the unemployment rate could occur. B) A period of expansion and a rise in the unemployment rate could occur. C) An increase in the price level and real GDP will occur. D) The price level will fall but real GDP will remain the same.
Under a gold standard, a balance of payments surplus automatically
a. raised interest rates. b. increased exports. c. increased domestic prices. d. decreased imports.
Given that Sandy can produce 10 economics reports or 2 sales calls and Tim can produce 2 economics reports or 1 sales call, which of the following is FALSE?
A) Sandy has a comparative advantage in sales calls. B) Tim has a comparative advantage in sales calls. C) Sandy has a comparative advantage in economics reports. D) Sandy has an absolute advantage in both economics reports and sales calls.