In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce
A. the product at a lower domestic opportunity cost than the other nation.
B. more of the product than the other nation.
C. the product with fewer inputs than the other nation.
D. the product at lower average cost than the other nation.
Answer: A
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In the above figure, between 5 and 10 units per hour, the firm experiences
A) economies of scale. B) diseconomies of scale. C) constant returns to scale. D) decreasing total fixed costs.
If a commodity’s price is above its marginal cost, the market will tend to produce too much of the good.
Answer the following statement true (T) or false (F)
If Israel's domestic investment exceeds its national saving, then Israel has
a. positive net capital outflows and negative net exports. b. positive net capital outflows and positive net exports. c. negative net capital outflows and negative net exports. d. negative net capital outflows and positive net exports.
One major characteristic of the price system is that
A) consumers together are the ones who ultimately decide what is produced. B) individual sellers ultimately decide what is produced in the market. C) competition among sellers is reduced. D) all exchanges are regulated by the government.