A country will export wheat if, with no international trade, ______
A. it produces a surplus of wheat
B. its opportunity cost of producing wheat is below the world price
C. its domestic price of wheat exceeds the world price
D. other countries have a shortage of wheat
B If the opportunity cost of producing wheat is below the world price, the country has a comparative advantage in wheat pro-duction.
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What is rent seeking and how is it related to regulatory capture?
What will be an ideal response?
A profit-maximizing firm will increase its use of capital and decrease its use of labour when the:
a) marginal product of capital is higher than the marginal product of labour. b) marginal product of capital, per dollar spent on capital, is less than the marginal product of labour, per dollar spent on labour. c) average product of capital is higher than the average product of labour. d) total product of capital is higher than the total product of labour. e) marginal product of capital, per dollar spent on capital, is greater than the marginal product of labour, per dollar spent on labour.
The Farley Farm, a dairy company, has total costs of $15,000 and total variable costs of $2,000. The Farley Farm's total fixed costs are
A) $0. B) $13,000. C) $17,000. D) indeterminate because the firm's output level is not known.
A natural monopoly arises when:
A. economies of scale are so great that only one firm can exist in a market. B. a firm acquires a patent. C. two firms merge to become the only firm serving an entire market. D. a single firm controls all of a natural resource.