If the opportunity cost is constant (the PPF is a straight line), then a country will:
a. partially specialize in the production of its exported product.
b. completely specialize in the production of its exported product.
c. not benefit from importing goods from another country.
d. benefit by raising trade barriers.
Ans: b. completely specialize in the production of its exported product.
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Which of the following types of income are subject to FICA taxes?
A. Interest income B. Inheritance C. Wages and salaries D. Capital gains
Refer to the above figure. Profits will equal zero
A) when the price equals $1. B) when the price equals $2. C) when the price equals $4. D) at prices between $1 and $2.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Which of the following is not a characteristic of long-run equilibrium in a monopolistically competitive market?
A) Selling price equals average total cost. B) Production is at minimum average total cost. C) Marginal revenue equals marginal cost. D) Selling price is greater than marginal cost.