Trade can make everybody better off because it
a. increases cooperation among nations.
b. allows people to specialize according to comparative advantage.
c. requires some workers in an economy to be retrained.
d. reduces competition among domestic companies.
b
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The above figure shows the U.S. market for 1 carat diamonds. With free trade, U.S. production of diamonds is equal to ________ diamonds. When the quota illustrated in the figure is in place, U.S. production is equal to ________ diamonds
A) 300,000; 100,000 B) 100,000; 500,000 C) 300,000; 500,000 D) 100,000; 300,000 E) 900,000; 700,000
Refer to the scenario above. Pat should submit a bid of ________
A) $200 B) $180 C) $45 D) $135
A program to reduce inflation is likely to have lower costs if the sacrifice ratio is
a. high and the reduction is unexpected. b. high and the reduction is expected. c. low and the reduction is unexpected. d. low and the reduction is expected.
It is possible through trade for a country to consume a combination of goods that lies beyond its production possibilities frontier.
Indicate whether the statement is true or false.