Comparative advantage implies choosing the activity that
A. has the lowest opportunity cost.
B. does not demand any specialization.
C. is inside the production possibilities frontier.
D. has a high opportunity cost.
Answer: A
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"Reciprocity pacts" started springing up in the
A) 1920s. B) 1950s. C) 1960s. D) 1980s.
Suppose that the exchange rate between Mexican pesos and dollars is 8 pesos per dollar. If the exchange rate goes to 6 pesos per dollar, it would tend to: a. decrease U.S. exports to Mexico
b. increase U.S. exports to Mexico. c. increase Mexican exports to the United States. d. both (a) and (c)
The world’s nations meet through the World Trade Organization to negotiate how they can reduce barriers to trade and to ___________ trade.
a. discourage b. prevent c. encourage d. limit
Which of the following statements is true?
A) Because of the transitional problems affecting some factors of production, the net benefits of free trade are generally negative. B) Most economists are in favor of opening markets and extending international trade throughout the world. C) Because of the compelling case for free trade, there are very few strong opponents and arguments against free trade remaining in the world today. D) Cheap labor in foreign countries can almost always out-compete expensive labor in the United States.