If one nation is able to produce a good at a lower opportunity cost than another, it has
A) an absolute advantage in that good.
B) a comparative advantage in that good.
C) a productivity advantage in that good.
D) a technological advantage in that good.
B
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Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia
a. may prompt Russian farmers to invoke the infant-industry argument. b. increase the consumer surplus of Russian buyers of wheat. c. decrease the total surplus of the Russian people. d. All of the above are correct.
Acme Computer Co sells computers to retail stores for $400 . If Acme requires the retailers to charge customers $500 for the computers, then it is engaging in
a. resale price maintenance. b. predatory pricing. c. tying. d. monopolistic competition.
You get bit by your neighbor's dog, and incur $200 in emergency medical expenses. What happens to GDP?
A) It increases by $200. B) It decreases by $200. C) It remains unchanged. D) It depends upon whether you or the dog owner pays the medical bill.
Refer to Figure 7-2. At the market equilibrium, the deadweight loss is equal to
A) $0. B) $500,000. C) $1,000,000. D) $2,000,000.