Country X and Country Y produce scud missiles and wheat. Country X has a comparative advantage in the production of scud missiles while Country Y has a comparative advantage in wheat. Present an argument f or and against free trade between these two countries
The argument for free trade is that there are economic gains to be had from specialization. More output can
be produced from the same quantity of resources. The argument against free trade is that Country Y may
not want to be dependent on Country X for its national security and Country X may not want to be
dependent on Country Y for its food.
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A shortage occurs when price is higher than the market equilibrium.
Answer the following statement true (T) or false (F)
The above figure shows the production possibility frontier for an economy. The point or points that are not attainable are
A) points B and C. B) points A, B, and C. C) point E. D) points A, B, C, and D. E) points A and D.
Refer to Scenario 13.16. If Gooi moves first, the payoff in equilibrium will be
A) $150, $0. B) $150, $300. C) $400, $150. D) $50, $50. E) $650, $450.
Consider the following game. You pick a card from a deck and each time you select an ace, you get $260. For all other cards you must pay $13. What is the expected value of the game?
A. -$12 B. $0 C. $8 D. $32