Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 8 yards of fabric or 4 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 3 yards of fabric or 6 bushels of wheat. Based on this information
A. the United States will benefit from trading but Japan will not.
B. both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric.
C. both nations will gain from specialization and trade, with the United States exporting fabric and Japan exporting wheat.
D. beneficial trade is absolutely impossible between the two countries.
Answer: C
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According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to
A) a decrease in government expenditure on goods and services. B) no change in GDP because only federal government expenditures are included in GDP. C) a decrease in gross private domestic investment. D) no change in GDP because state and local government expenditure is always canceled out by federal government expenditure.
The best example of an economic goal of a firm is
A) providing good products/services to its customers. B) improving its public image. C) increasing employee morale. D) increasing shareholder wealth.
Pencils sell for 10 cents and pens sell for 50 cents. Suppose Jack, whose preferences satisfy all of the basic assumptions, buys 5 pens and one pencil each semester. With this consumption bundle, his MRS of pencils for pens is 3
Which of the following is true? A) Jack could increase his utility by buying more pens and fewer pencils. B) Jack could increase his utility by buying more pencils and fewer pens. C) Jack could increase his utility by buying more pencils and more pens. D) Jack could increase his utility by buying fewer pencils and fewer pens. E) Jack is at a corner solution and is maximizing his utility.
If a firm decreases output when MR < MC, then:
a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.