It's not likely that a country will specialize completely in one good even if it has a lower opportunity cost because
A. The country would end up inside its production possibilities curve.
B. Comparative advantage is not a workable concept in the world economy.
C. Opportunity costs increase as more of a good is produced.
D. The country would want to save some of the good for its own citizens.
Answer: C
You might also like to view...
The federal budget exhibited a $128.7 billion surplus in 2001 but moved to a deficit of $157.8 billion in 2002
Some argued the deficit was opened up because of the Bush 2001 tax cuts, but others argued that the deficit grew because of the recession suffered in 2001. Evaluate the validity of the second argument.
If the government legalizes the purchase and sale of marijuana, the equilibrium quantity would _________ and the price would ________ if the supply of marijuana increased by _______ than the demand for marijuana increased as a result of the legalization
A) rise; rise; more B) fall; rise; more C) rise; fall; more D) rise; rise; less E) none of the above
Suppose that the EPA has proposed strict controls on the amount of sulfur that diesel fuel contains. These controls were designed to fully offset the cost of pollution generated by diesel fuel vehicles. The effect of the regulation is estimated to increase the equilibrium price of a gallon of diesel fuel by 10 cents. Assuming that the supply of diesel fuel has a positive slope and demand has a negative slope, the quantity of diesel fuel sold after imposition of the regulation will:
A. decrease only if diesel fuel is a normal good. B. decrease. C. remain the same. D. increase.
Explain how a change in the reserve ratio affects the money supply.
What will be an ideal response?