Suppose there are two countries (Home and Foreign) that produce two goods. Home's wages are 100% greater than Foreign's wages. Will trade be possible between Home and Foreign?
a. No, because Foreign's wages are lower than Home's wages.
b. Yes, Foreign will be able to export both products to Home.
c. Yes, as long as Home's marginal productivity of labor in one product is at least 100% higher than Foreign's marginal productivity of labor in the same product.
d. No, because prices will be the same in each country.
Ans: c. Yes, as long as Home's marginal productivity of labor in one product is at least 100% higher than Foreign's marginal productivity of labor in the same product.
You might also like to view...
The 1920s were characterized by large numbers of bank failures each year, especially among country banks. Country banks were particularly inclined to fail because:
a. they tended to open too many branches. b. they were not allowed to issue checking accounts. c. they were not allowed to join the Federal Reserve system. d. farm mortgages constituted the major portion of their loans. e. All of the above.
In financial markets, buyers are people who:
A. want to spend money on something of value right now, but don't have cash on hand. B. have cash on hand and are willing to let others use it, for a price. C. want to spend money on something of big value in the future, but don't know how to save for it. D. have cash promised to them at some future date.
In this chapter, virtue can lead to material gain and therefore it can be an important part of the social order. Evaluate this view of virtue or moral behavior. Is material gaining a sufficient motive for morality? Is moral behavior based on more than the possibility for personal gain?
What will be an ideal response?
Ceteris paribus, if Korea increases the size of its military, then its production:
A. Possibilities curve will shift outward. B. Possibilities curve will shift inward. C. Of consumer goods will increase. D. Of consumer goods will decrease.