In the text, U.S. and Mexico specialize in the production of corn and oil, respectively. They trade and both end up with more corn and oil. How much each gains from trade depends on
a. who has the comparative advantage
b. who has the absolute advantage
c. how efficiently the U.S. and Mexico produce corn and oil
d. the import/export ratio
e. the price of oil in terms of corn
E
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"If production of a good creates an external cost, then, when production is such that the marginal private costs are equal to the marginal private benefits, the market outcome will be inefficient
" Explain whether this assertion is correct or incorrect.
The main avenue by which a temporary change in government purchases in the classical model affects the labor supply is by
A) changing the population. B) affecting the value of the stock market. C) increasing business confidence. D) affecting workers' wealth.
China has experienced particularly high rates of economic growth as a result of
A. High rates of government spending. B. High rates of capital investment. C. High rates of consumer spending. D. Low rates of saving.
When national income in other nations decreases, aggregate:
A. demand increases. B. supply decreases. C. demand decreases. D. supply increases.