The Ricardian model demonstrates that
A) trade between two countries will benefit both countries.
B) trade between two countries may benefit both regardless of which good each exports.
C) trade between two countries may benefit both if each exports the product in which it has a comparative advantage.
D) trade between two countries may benefit one but harm the other.
E) trade between two countries always benefits the country with a larger labor force.
C
You might also like to view...
If a product is narrowly defined, it is likely to
A) have many substitutes and therefore its demand is elastic. B) have few substitutes, and therefore its demand is less elastic. C) be unique, and therefore its demand is inelastic. D) be unique and have many substitutes. E) have a larger proportion of income spent on it.
If the demand for bathing suits and supply of bathing suits both decrease, then definitely the equilibrium
A) price will decrease. B) price will increase. C) quantity will increase. D) quantity will decrease.
To judge a statistical relationship, should a researcher preferably rely on a small sample or a large sample? Explain your answer
What will be an ideal response?
Recall that the Cobb-Douglas Utility function U(X,Y) = XaY1-a has the unusual property that the demand for each good depends only on its own price
Therefore, a consumer will always allocate the same proportion of income to each good. Specifically, the demand for X is X* = aI/px where I is income and px is the price of X. a. What is the price elasticity of demand for X? b. What is the direction of the income effect on X of an increase in px?