The trade model described in the text demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage
In reality we do not see complete specialization in production. State three reasons why this is case.
Three reasons outlined in the text are:
1. Not all goods and services are traded internationally.
2. As more exported goods are produced, the opportunity cost of producing additional units eventually increases.
3. Since most products are differentiated, some buyers prefer to purchase domestically produced products while others will prefer to buy similar products produced abroad. The automobile industry is a good example of this.
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In what ways is the Fed independent of the political process?
What will be an ideal response?
If a firm is facing inelastic demand, then the firm should decrease price to increase revenue
a. True b. False Indicate whether the statement is true or false
Stocks change ________ whereas flows relate to ________.
A. within a given period of time; changes between points in time B. and that causes flows to change; changes that have no impact on stocks C. only at the end of each year; amounts at a given point in time D. between points in time; changes within a given time period
In the short run, a decrease in supply
A. means an upward movement along a given supply curve. B. can only occur if market price falls. C. may be caused by an increase in resource costs. D. always occurs if the incomes of buyers fall sharply.