If we add together all the gains from specialization and trade and then subtract all the losses, the net result would be
A. Positive: a net gain for the world and each country.
B. Negative: a net loss for the world and each country.
C. Impossible to tell: the net result could be zero, positive, or negative.
D. Zero: the gains and losses would cancel out.
Answer: A
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"When a person is more productive in producing a good or service than another person, the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer
What will be an ideal response?
The "law of demand" refers to the fact that, other things remaining the same, when the price of a good rises,
A) the demand curve shifts rightward. B) the demand curve shifts leftward. C) there is a movement down along the demand curve to a larger quantity demanded. D) there is a movement up along the demand curve to a smaller quantity demanded. E) the demand curve shifts rightward and there is a movement up along the demand curve to a smaller quantity demanded.
The price of food relative to other goods has:
A. fallen, making it harder to live on less income because other goods cost so much. B. increased, making it easier to live on less income because other goods cost less. C. fallen, making it easier to live on less income. D. increased, making it harder to live on less income.
Related to the Economics in Practice on page 318: Producers of Honest Tea stop adding sugar to their tea when the marginal utility to consumers of doing so is
A. negative. B. positive. C. zero. D. Indeterminate from the given information.