Firms in industrial countries find a larger market for their goods in other industrial countries than in developing countries because:
a. the consumption patterns in the industrial countries are highly heterogeneous.
b. the trade policies of the industrial nations are more favorable than the developing countries.
c. the industrial countries tend to have a higher population than the developing countries.
d. the industrial countries are capital intensive countries.
e. the consumption patterns in the industrial countries are more or less similar.
e
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If the marginal social cost of generating a kilowatt of electricity is $0.10 and the marginal private cost is $0.08, what is the marginal external cost?
A) $0.18 B) $0.10 C) $0.08 D) $0.02 E) $0.80
Explain why a minimum wage creates an inefficient allocation of labor resources
What will be an ideal response?
The national defense argument for trade restriction holds that
A) the president should have the authority to erect trade barriers in case of war or national emergency. B) free trade is a danger to the national defense because open borders increase the likelihood that spies will get into the country. C) a country should produce those goods necessary for national defense purposes even if it doesn't have a comparative advantage in them. D) if your enemy erects trade restrictions, so should you.
GDP understates the value of output produced by an economy because it:
A. includes transactions that do not take place in organized markets, such as home-cooked meals. B. excludes value added from the underground economy, such as tips taken "under the table." C. includes environmental degradation caused by increased output production. D. excludes the value of the wages and benefits of government employees.