Most trading nations do not completely specialize. Incomplete specialization is mainly due to:
a. decreasing opportunity costs.
b. increasing opportunity costs.
c. constant opportunity costs.
d. perfectly substitutable resources.
Ans: b. increasing opportunity costs.
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The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month
A) the market is efficient because the marginal social benefit from coffee exceeds its marginal social cost. B) the market is efficient because the total social benefit from coffee exceed the total social cost. C) there is a deadweight loss because the marginal social benefit from the last pound of coffee exceeds its marginal social cost. D) there is a deadweight loss because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.
Answer the following statements true (T) or false (F)
1. Only in developing nations would one expect the value of either exports or imports to exceed 200 percent of gross national product. 2. In dollar value, the United States is the largest importer in the world. 3. The value of U.S. exports is about 10 percent of its GDP. 4. Although political arguments strongly favor free trade, most decisions affecting international trade are made in the economic arena. 5. The only factor determining whether a country can develop a comparative advantage in production is the degree to which it has a highly skilled labor force.
Why do nations often impose trade barriers that make it difficult for their own citizens to trade with people in another country?
What will be an ideal response?
There is a permanent underclass totaling about _____% of our population.
Fill in the blank(s) with the appropriate word(s).