Economists believe that trade is necessary for prosperity because
a. every country lacks some vital resources that it can get only by trade.
b. each country's climate makes it a relatively efficient producer of some goods, and an inefficient producer of other goods.
c. specialization permits large outputs and can produce economies of scale.
d. All of the above are correct.
d
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There is some debate about whether secondary benefits should be considered when assessing public policy proposals. Identify two reasons why secondary benefits might be excluded from a benefit-cost analysis of proposed environmental policy.
What will be an ideal response?
When a monopolist engages in perfect price discrimination, the quantity produced and sold
A) could be lower, higher, or the same as that produced and sold if it adopted a single price. B) is lower than the quantity produced and sold if it adopted a single price. C) is larger than the quantity produced and sold if it adopted a single price. D) is the same level as that produced and sold if it adopted a single price.
Which of the following statements is consistent with the Coase theorem?
A. In the case of zero transaction costs, a property rights assignment (made by a court) will be undone if it benefits the relevant parties to undo it. B. In the case of zero transaction costs, the resource allocative outcome will be the same no matter who is assigned the property right. C. Taxes can do what property rights assignments cannot. D. The market can solve all negative externality problems. E. a and b
Which of the following could explain an increase in demand for labor?
a. additional training that increases the productivity of each unit of labor in this market b. an increase in the amount of risk associated with this job c. a decrease in the amount of risk associated with this job d. an improvement in the working conditions associated with this job e. a decline in the working conditions associated with this job