If China has an absolute advantage over Canada in producing both rice and tires, then
a. China should produce both rice and tire and Canada should produce both rice and tires
b. there are no benefits possible to China from specialization
c. Canada should produce tires and China should produce rice
d. China should produce tires and Canada should produce rice
e. more information is needed to tell whether China or Canada should specialize
E
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The Tiebout model assumes that public services are financed by a proportional property tax.
A. True B. False C. Uncertain
If the quantity output and average cost at that output level are known, then it is possible to determine marginal cost for that output level.
Answer the following statement true (T) or false (F)
If the real exchange rate is greater than 1, then the
a. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would buy more then enough foreign currency to buy the same good overseas. b. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas. c. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would buy more then enough foreign currency to buy the same good overseas. d. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.
A trade surplus occurs when:
A. quotas exceed tariffs. B. tariffs exceed quotas. C. imports exceed exports. D. exports exceed imports.