If a nation is more productive than a trading partner, can it still gain from trade with that partner? Use the concepts of absolute and comparative advantage to explain
What will be an ideal response?
The gains from trade do not rely on overall productivity (absolute advantage) but on differences in relative prices (comparative advantage). In producing a good or service, as long as a trading partner gives up fewer units of an alternate product, we can gain from trade with them.
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Describe the policy of "outright monetary transactions" or 0MT presented by the president of the European Central Bank in 2012
What will be an ideal response?
Wars, new inventions, harvest failures, and changes in government policy are examples of
A) the business cycle. B) economic models. C) shocks. D) opportunity costs.
Changes in the output of a perfectly competitive firm, without any change in the price of the product, will change the firm's
a. total revenue. b. marginal revenue. c. average revenue. d. All of the above are correct.
Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then the wage rates will tend to
a. rise in both markets. b. fall in both markets c. rise for the union jobs, but remain unchanged for the nonunion jobs. d. rise for the union jobs and fall for the nonunion jobs.