According to the theory of comparative advantage, specialization and free trade will benefit
A. only that trading party that has both an absolute advantage and a comparative advantage in the production of all goods.
B. only that trading party that has an absolute advantage in the production of all goods.
C. only that trading party that has a comparative advantage in the production of all goods.
D. all trading parties, even when some are absolutely more efficient producers than others.
Answer: D
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Which of the following is the best example of a good or service with an external benefit?
A) gasoline B) education C) garbage disposal D) fertilizers E) bread
Which of the following is true of units of utility?
a. Each unit is worth $1. b. They cannot be compared across consumers. c. They apply to goods but not to services. d. They do not exist for very wealthy individuals. e. They are negative for inferior goods.
Cartels are likely to be better able to prevent their members from cheating on an agreement: the greater the number of members in the cartel.
a. the fewer the number of members in the cartel b. the greater the number of members in the cartel. c. the greater are the differences in production costs across member firms. d. the greater are the differences in demand projections across member firms.
If the firm were a perfect competitor in the long run, what price would it charge?
