Why is trade based on comparative advantage?
What will be an ideal response?
The relevant cost of producing a good is how much of other goods must be sacrificed. The opportunity cost of a good is the economically important cost, and comparative advantage is based on opportunity costs. World output can be greater when countries specialize based on comparative advantage.
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Is faster economic growth unambiguously better?
A. No, because growth has an opportunity cost. B. No, because growth serves no useful purpose. C. Yes, because more goods and services are always better. D. Yes, because it expands the production possibilities of an economy. E. Uncertain, economic growth has no answer to this question.
A nonexcludable public good is
A. nonrivalrous in consumption. B. rivalrous in consumption. C. asymmetric. D. a good for which it is impossible (or prohibitively costly) to exclude someone from receiving the benefits of its services. E. a and d
If people specialize in producing those goods for which they possess a comparative advantage, then the economy as a whole can produce a greater quantity of goods
a. True b. False
Louise is unemployed due to a decrease in the demand for workers with knowledge of a certain word processing language. This is an example of