Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that
a. if Canada were to allow trade, it would export hockey sticks.
b. Canada has an absolute advantage, relative to other countries, in producing hockey sticks.
c. Canada has a comparative advantage, relative to other countries, in producing baseball bats.
d. All of the above are correct.
a
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Which of the following increases the demand for U.S. union labor?
A) an increase in the minimum wage B) an increase in the demand for imported goods C) new laws that ease immigration restrictions D) All of the above cause an increase in the demand for union labor.
The argument that suggests that regulators balance the interests of firms, consumers, and legislators is called
A) the capture hypothesis. B) the creative response theory. C) the share-the-gains, share-the-pains theory. D) the theory of optimal regulation.
The "Lemon's" argument helps to explain why
A. physical depreciation is the only reason for the sharp price differential between new and used cars. B. physical depreciation is an insufficient reason for the sharp price differential between new and used cars. C. new and used cars sell for more than their intrinsic value would suggest. D. used cars fail to satisfy consumer demands for transportation.
The largest source of income for banks is
a. the interest received from loans b. fees charged to customers for accounts c. money deposited in savings accounts d. fees charged on credit cards