A country is most likely to have a comparative advantage in the production of cars if:
A. it has a relative abundance in the natural resources needed to produce cars.
B. it imports most of the raw materials necessary to produce cars.
C. its citizens prefer driving cars to other forms of transportation.
D. it has strict environmental protection laws governing automobile emissions.
Answer: A
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The Lorenz curve in the above figure implies that
A) income is equally distributed. B) the lowest fifth of households account for less than 20 percent of income. C) the highest fifth of households account for less than 20 percent of income. D) the lowest fifth of households account for more than 20 percent of income.
The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms
Indicate whether the statement is true or false
Tariffs and quotas create a loss in social welfare because
A) producer surplus declines. B) revenues from tariffs are misspent. C) consumer surplus declines. D) All of the above.
Why is the Chair of the Fed Reserve considered by many to be the most powerful person in the economic world?