Critically evaluate the following statement. "Only if a country enjoys an absolute advantage in the production of a particular good will that country find it beneficial to trade it with another country
What will be an ideal response?
Absolute advantage is not what governs trade. Trade occurs instead because of comparative advantage that one country might have over another in the production of a particular good or service.
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Refer to the accompanying figure. If Laura and Chris are the only two consumers in this market, then the market demand for hamburger will be 9 pounds per week when the price of hamburger is:
A. $1.00 per pound. B. $2.50 per pound. C. $1.50 per pound. D. $2.00 per pound.
The aggregate expenditure curve shows
What will be an ideal response?
President Salinas of Mexico devised a strategy to restore Mexican growth by encouraging
A) large inflows of foreign capital. B) large increases in domestic savings. C) an expansion of import substitution industrialization policies. D) more government ownership of industrial firms.
The graph shown demonstrates a tax on buyers. Who bears the greater tax incidence?
A. The buyer B. The government C. The seller D. The incidence is equally shared between buyer and seller