Countries gain from specializing in producing goods in which they have ________ and trading for goods in which other countries have ________
A) a comparative advantage; an absolute advantage
B) an absolute advantage; an absolute advantage
C) a comparative advantage; a comparative advantage
D) an absolute advantage; a comparative advantage
Answer: C
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Unlike economic profit, economic rent:
A. only applies to land. B. may not be driven to zero by competition. C. doesn't involve opportunity costs. D. can be less than zero.
Gross domestic product calculations count only final goods and services because
A) counting all goods and services would lead to double-counting of many activities. B) these are the only goods and services that are purchased in an economy. C) one cannot calculate the quantities of intermediate goods produced. D) it is difficult to measure the prices of intermediate goods produced.
If financial investors believe that the prices of bonds and other assets will fall,
A) their precautionary demand for money goes up. B) their speculative demand for money goes up. C) their precautionary demand for money goes down. D) their speculative demand for money goes down.
In general, risk-averse individuals experience diminishing marginal utility from income.
Answer the following statement true (T) or false (F)