The Dominican Republic has a comparative advantage in the production of tobacco, and Panama has a comparative advantage in the production of oranges. If both countries specialize based on the theory of comparative advantage
A. only the production of both goods will increase.
B. only the consumption of both goods will increase.
C. only the production of tobacco will increase.
D. the production and consumption of both goods will increase.
Answer: D
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Child poverty is
A. much more of a problem in France, Germany, and Japan than it is in the U.S. B. less of a problem in the United States than in Canada, Britain, or Italy. C. more of a problem in Sweden, Denmark, and Ireland than it is in the U.S. D. much more of a problem in the U.S. than in virtually all other industrialized countries.
The product approach to measuring GDP values government production at
A) market prices. B) its cost of production. C) its estimated value to society. D) the total amount of taxes it collects.
The "guns versus butter" dilemma that all nations confront is that
A. An increase in national defense implies more sacrifices of civilian goods and services. B. Guns and butter can be produced using the same resources at the same time. C. An increase in national defense is possible only if we produce more butter. D. All of the choices are correct.
Suppose a small country sets all of its tariffs at 40 percent which causes a reduction in imports by 20 percent. If the total imports affected by the tariffs are 40 percent of the gross domestic product (GDP), the net national loss from the tariffs as a percentage of GDP is
A. 3.2%. B. 6.4%. C. 1.6%. D. close to 90%.