The existence of absolute advantage
A. implies that there will be no benefits from trade taking place between two nations.
B. refers to a situation where one country can produce one particular good with fewer units of resources than the other country.
C. fosters the self-sufficiency of the two nations.
D. refers to a situation in which one country can produce all goods with fewer units of resources than can another country.
B. refers to a situation where one country can produce one particular good with fewer units of resources than the other country.
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Markets will always create more efficient outcomes without government intervention
a. True b. False Indicate whether the statement is true or false
Which of the following transactions would be excluded in the capital account?
A. A Japanese citizen purchases a U.S. Treasury bill. B. A Japanese citizen purchases an office building in Manhattan. C. A U.S. citizen purchases a share of stock from a Japanese company. D. An American purchases a Toyota.
Nettie can produce either 8 cupcakes or 4 hamburgers. Becky can produce either 4 cupcakes or 8 hamburgers. Suppose that Nettie and Becky each specialize in the production of the good for which they have a comparative advantage and decide to trade. The terms of trade are 1 cupcake for 1 hamburger. After trade, how many hamburgers will Nettie consume if Becky consumes 4 hamburgers? How many cupcakes will Becky consume if Nettie consumes 4 cupcakes?
A. Nettie consumes 0 hamburgers, Becky consumes 4 cupcakes B. Nettie consumes 4 hamburgers, Becky consumes 0 cupcakes C. Nettie consumes 4 hamburgers, Becky consumes 4 cupcakes D. Nettie consumes 0 hamburgers, Becky consumes 0 cupcakes
Presumably, since the United States is a large country in many of its international markets, a positive optimum tariff exists for this country
It follows therefore that when any legislator or government official who promotes zero-tariff free trade policies, is by definition not acting in the public's best interest. Discuss.