Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. Which of the following statements is true?
a. Both countries could gain from trade with each other.
b. Neither country could gain from trade with each other because Cornland has an absolute advantage in both goods.
c. Neither country could gain from trade with each other because neither one has a comparative advantage.
d. Oatland could gain from trade between the two countries, but Cornland definitively would lose.
c
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If the interest rate on student loans ________, students will ________
A) falls from 6 percent to 1 percent; not change their saving but will change their investment B) rises from 6 percent to 12 percent; increase their consumption before it becomes too expensive C) rises from 6 percent to 12 percent; increase their saving in order to pay back the loan sooner D) falls from 6 percent to 1 percent; increase their saving in order to pay back the loan sooner E) None of the above answers is correct.
In a zero-sum game, ________
A) each player earns a zero payoff irrespective of the strategy one chooses B) each player has a dominant strategy C) each player chooses a pure strategy D) one player's loss is another player's gain
Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish ________ and the equilibrium quantity ________
A) rises; decreases B) rises; increases C) falls; decreases D) falls; increases
Consumers in a monopolistically competitive market do not receive any consumer surplus because the price paid for the product exceeds the marginal cost of production
Indicate whether the statement is true or false