When a country has a lower opportunity cost in producing a good than any other country,
A. It necessarily has an absolute advantage in producing the good.
B. Consumption possibilities will increase with specialization and trade.
C. It has favorable terms of trade in producing the good.
D. Production possibilities are no longer limited.
Answer: B
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The table below gives the quantities and prices for 2010 and 2015 for an economy that produces just two goods: sailboats and coconuts. Quantity producedPrice 2010201520102015Sailboats1020$500$525Coconuts2,0002,400$1$2For this economy that produces just sailboats and coconuts, and with 2010 is the base year, real GDP was approximately ________ times larger in 2015 than it was in 2010.
A. 1.77 B. 2.19 C. 1.34 D. 1.65
As conflicts between principles of taxation are normative in nature, _____
a. agreement is easily reached b. disagreement cannot easily be resolved c. the benefit principle should be the proper default d. the Pareto criteria should be used instead
Most economists in the U.S. believe that the price mechanism leads to
A. an efficient allocation of resources. B. an equitable distribution of income. C. both an efficient allocation of resources and an equitable distribution of income. D. neither an efficient allocation of resources nor an equitable distribution of income.
Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cars in the market are lemons (low quality), how many plums will be supplied in the market?
A. 30 B. 40 C. 70 D. 120