If nation A has a comparative advantage over nation B in the production of a product, this implies:
a. it requires fewer resources in A to produce the good than in B.
b. the cost of producing the good in terms of some other good's production that must be sacrificed is lower in A than in B.
c. that nation B could not benefit by engaging in trade with A.
d. that nation A should acquire this product by trading with B.
e. that nation A could not benefit by engaging in trade with B.
b
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There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand, we must
A) multiply the price times quantity for each buyer and then add the resulting products together. B) add the quantities that each buyer will purchase at every price. C) add the prices that each buyer will pay at every quantity. D) average the price each buyer is willing to pay for each given quantity. E) give up because there is no way to find the market demand.
If a public good was left to be provided by the private sector
A) more than the efficient quantity would be produced. B) less than the efficient quantity would be produced C) the efficient quantity would be produced D) the good would be provided at a very low price.
How do fluctuations in aggregate demand and short-run aggregate supply bring fluctuations in real GDP around potential GDP?
What will be an ideal response?
An effective price floor will:
A. force some firms in this industry to go out of business. B. result in a product surplus. C. result in a product shortage. D. clear the market.