Explain why it is not possible for a country to have comparative advantage in the production of all goods
If a certain country is more efficient at producing all goods than its trading partners, the country in question would have an absolute advantage in the production of these goods. However, a greater capacity of producing good A would imply a greater opportunity cost of producing good B. In this way, the country in question cannot have lower opportunity costs for all goods.
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If people have never implemented an idea that you believe offers substantial opportunity:
A. you should seek a low interest loan immediately in order to launch your product. B. you should conclude people are irrational. C. your evaluation might be missing something and you should carefully revisit the first three economists' questions. D. you should conclude that you are being irrational.
With an upward-sloping short-run aggregate supply curve, firms respond to a change in aggregate demand by adjusting:
A. prices but not quantities in the short run. B. quantities but not prices in the short run. C. neither prices nor quantities in the short run. D. both prices and quantities in the short run.
Which of the following is NOT a characteristic of firms in a monopolistically competitive market?
A. advertising B. ease of entry and exit C. existence of significant economies of scale D. differentiated products
Which of the following would be classified as fiscal policy?
A) The federal government cuts taxes to stimulate the economy. B) States increase taxes to fund education. C) A state government cuts taxes to help the economy of the state. D) The Federal Reserve cuts interest rates to stimulate the economy. E) The federal government passes tax cuts to encourage firms to reduce air pollution.