Answer the following statement(s) true (T) or false (F)
1. If each person specializes in his area of comparative advantage and then trades for the goods he wants to have, everyone will be made better off.
2. If no one in a community desires to watch television, then it would be a waste of resources for the community to produce television sets.
3. If good wines can be produced in Turkey at costs lower than in the wine exporting countries, but the local population drinks little wine, then Turkey should not produce wine.
4. Trade will never be beneficial when both parties have a comparative advantage in producing the same good.
5. If everyone had the same abilities, then no one could benefit from trade.
1. True
2. False
3. False
4. False
5. False
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Fresh orange juice and frozen orange juice are substitutes in production. The price of fresh orange juice rises. As a result, the equilibrium price of frozen orange juice ________ and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) does not change; decreases D) falls; increases E) falls; decreases
A . Can you explain why some employees who work for monopsonists might feel that they are underpaid? b. Why can't the firm raise their wage rates to keep them from feeling this way?
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. e. The GDP Price Index and reserve-related (central bank) transactions remain the same.
What is the mechanism at work that causes the increase in a country's government spending to have an impact on foreign countries' production and income?
What will be an ideal response?