The reason that most of the coffee that is consumed in the United States comes from Colombia is that
A. Colombia has an absolute advantage in producing coffee relative to the United States.
B. Colombia has a comparative advantage in producing coffee relative to the United States.
C. government trade disincentives regarding Colombian coffee make such trade possible.
D. coffee cannot be grown in the United States.
Answer: B
You might also like to view...
If a firm has excess capacity, it
A) produces less than its efficient scale. B) should advertise to maximize profits. C) should decrease its markup to increase its profit. D) is a perfectly competitive firm. E) must face a horizontal demand curve.
A rule that a foreign company export a minimum percentage of its output is considered
a. local content requirement b. national treatment c. performance requirement d. most favored nation treatment e. none of the above
Which of the following would reduce the ability of the self-correcting mechanism to direct an economy out of a recession quickly?
a. a decrease in the real rate of interest b. resource prices that are inflexible in a downward direction c. an increase in aggregate demand d. a low level of savings
Government failure occurs when government intervention fails to improve economic outcomes or makes them worse.
Answer the following statement true (T) or false (F)