The principle of comparative advantage does not provide answers to certain questions. One of those questions is
a. Do specialization and trade benefit more than one party to a trade?
b. Is it absolute advantage or comparative advantage that really matters?
c. How are the gains from trade shared among the parties to a trade?
d. Is it possible for specialization and trade to increase total output of traded goods?
c
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Saving by households
A) decreases when the real interest rate rises. B) increases when the real interest rate rises. C) increases when the real interest rate falls. D) is unaffected by the real interest rate.
Refer to Figure 12-2. What is the amount of profit if the firm produces Q2 units?
A) It is equal to the vertical distance c to g multiplied by Q2 units. B) It is equal to the vertical distance g to Q2. C) It is equal to the vertical distance c to Q2. D) It is equal to the vertical distance c to g.
The various antitrust laws are written in very specific terms. Thus, there is little or no question as to when a firm has run afoul of one or more of these laws
Indicate whether the statement is true or false
Refer to Figure 9.3. If the market is in equilibrium, the consumer surplus earned by the buyer of the 100th unit is
A) $0.50. B) $0.75. C) $1.50. D) $2.00. E) $2.75.