If the production possibilities frontier of one trade partner ("Country A") is bowed out (concave to the origin), then increased specialization in production by that country will
A) increase the economic welfare of both countries.
B) increase the economic welfare of only Country A.
C) decrease the economic welfare of Country A.
D) decrease the economic welfare of Country B.
E) not affect the economic welfare of either country.
A
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The money rate of interest is the
a. real rate of interest minus the inflationary premium. b. real rate of interest plus the inflationary premium. c. real rate of interest divided by the inflationary premium. d. inflationary premium minus the real interest rate.
To decrease the money supply, the Fed may sell government securities or lower taxes
Indicate whether the statement is true or false
"Heuristics" used by the human brain are one of the reasons why:
A. Our preferences are quite stable and consistent B. Neoclassical economic models accurately predict human behavior C. Human perception is susceptible to context and prone to error D. The utility-maximizing model of decision-making is precise
The condition for profit-maximization for competitive firms and monopolies is the same: marginal revenue equals marginal cost. Hence, monopolies are efficient.
Answer the following statement true (T) or false (F)