If two countries agree to specialize and trade based on comparative advantage, which of the following is most likely to be true?
A) Both of the countries will consume outside their respective production possibilities curves.
B) One of the countries will end up receiving all of the gains from trade.
C) One of the countries will both consume and produce on its production possibilities curve.
D) Only one of the countries will produce on and consume outside its production possibilities curve.
A
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If government spending is $650 billion while government revenue is $950 billion, the government is said to have a
A) $300 billion budget surplus. B) $300 billion budget deficit. C) $1,600 billion budget balance. D) $950 billion budget deficit.
A debit card is more similar to a credit card than to a check
a. True b. False Indicate whether the statement is true or false
If the public debt increased by the same amount each year during the past three years, then
A. the U.S. Treasury must have issued securities to fund a flow of government spending that exceeded a flow of tax revenues by the same amount during each of the past three years. B. the U.S. government must have operated with the same budget surpluses during the past three years. C. the U.S. government must have experienced budget surpluses that increased by the same amount each of the past three years. D. during each of the past three years, the U.S. Treasury must have bought back the same amount of securities that had previously been issued to cover deficits experienced more than three years ago.
The government reduces the corporate profits tax. As a result, corporate profits increase. This will
A. increase the nonlabor income of households, causing consumption to increase and labor supply to increase. B. increase the nonlabor income of households, causing consumption to increase and labor supply to decrease. C. increase the nonlabor income of households, causing consumption to increase and labor supply to increase or decrease depending on the relative magnitude of the income and substitution effects. D. have no effect on households.