If a nation has a comparative disadvantage in the production of some commodity,
a. it can gain from international trade in that commodity only if it has an absolute advantage in that commodity.
b. it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if they produced it domestically.
c. it cannot gain from international trade in the
commodity.
d. it cannot gain from international trade unless it has an absolute advantage in every other commodity.
b
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An optimal decision is one that chooses
A. the most desirable alternative among the possibilities permitted by the resources available. B. the lowest cost method of meeting goals, without regard to quality or any other feature. C. among various possible goals and offends no one, so that all are equally happy. D. among equally important goals, and thereby avoids the “indispensable necessity” syndrome. E. among possible goals in such a way that spends as little money as possible.
In an agreement to exchange dollars for euros in three months at a price of $0.90 per euro, the price is the
A) spot exchange rate. B) money exchange rate. C) forward exchange rate. D) fixed exchange rate.
Third-degree price discrimination involves
A) charging each consumer the same two part tariff. B) charging lower prices the greater the quantity purchased. C) the use of increasing block rate pricing. D) charging different prices to different groups based upon differences in elasticity of demand.
Which of the following about economic growth is true?
a. The developed nations are growing rapidly and the less-developed nations are stagnating. b. Most of the countries that have achieved the highest growth rates in the world during the last quarter of a century were classified as LDCs in 1980. c. It is an oversimplification to divide the world into the growing, developed nations and the stagnating, less-developed nations. d. Both b and c are true. e. All of the above are true.