When a firm sells its good abroad below the cost of producing the good the firm is
A) using the concept of comparative advantage.
B) dumping.
C) taking advantage of the infant industry argument.
D) taking advantage of absolute advantage.
Answer: B
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If high incomes inspire more saving than low incomes ________
A) the average propensity to consume falls as income rises B) the marginal propensity to consume rises as income rises C) autonomous consumption falls as income rises D) the average propensity to consume rises as wealth rises
Extraneous events that are completely unrelated to economic fundamentals are called
A) moonbeams. B) black holes. C) sunspots. D) time warps.
The quantity theory of money states that if the velocity of money is stable or at least predictable, then: a. the quantity of money in circulation determines real GDP in the short run
b. the quantity of money in circulation determines aggregate spending. c. the quantity of money in circulation determines both real GDP and the price level in the long run. d. the quantity of money in circulation determines only the price level in the long run. e. the quantity of money in circulation determines the potential output in the long run.
Which of the following statements is most accurate? a. If something is rare it is also has to be scarce
b. Scarcity can and will be eliminated in the short run. c. Scarcity can and will be eliminated in the long run. d. Scarcity cannot be eliminated in any time frame.