When two countries trade with one another, it is most likely because
a. the wealthy people in each of the two countries are able to benefit, through trade, by taking advantage of other people who are poor.
b. some people involved in the trade do not understand that one of the two countries will become worse-off because of the trade.
c. the opportunity costs of producing various goods are identical for the two countries.
d. the two countries wish to take advantage of the principle of comparative advantage.
d
You might also like to view...
Which of the following is TRUE of a natural monopoly?
A) Its long-run average cost curve slopes upward as it intersects the demand curve. B) Economies of scale exist to only a very low level of output. C) Economies of scale allow one firm to supply the entire market at the lowest possible cost. D) The firm is not protected by any barrier to entry.
It is Valentine's Day and Fred is desperately searching all over town for a dozen roses to give to Diane. "I'll pay anything for a dozen roses," he says. Whether he really means it or not, the statement implies that his price elasticity of demand for roses is
a. infinite b. negative c. one d. greater than one e. zero
While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be
What will be an ideal response?
If a large percentage change in price leads to a smaller percentage change in quantity demanded, the result is a:
A. very elastic demand. B. high magnitude of response. C. less elastic demand. D. low magnitude of response.