According to the theory of comparative advantage, a country
A. exports goods in which it has absolute advantage.
B. imports the goods in which it has a comparative advantage.
C. imposes tariffs on goods in which it does not have comparative advantage.
D. exports the goods in which its has a comparative advantage.
Answer: D
You might also like to view...
All of the following are true about central bank independence except that it:
A. can be subverted by the actions of fiscal policymakers. B. can be eliminated by governments in a time of crisis. C. is usually guaranteed by a country's constitution. D. is usually given at the pleasure of governments.
Refer to Figure 16-4. In the graph above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by Congress and the president?
A) an increase in the marginal income tax rate B) an increase in interest rates C) an increase in transfer payments D) an open market purchase of Treasury bills
In 1984, the National Minimum Drinking Age Act was passed, raising the legal age to consume alcoholic beverages in the United States to 21. In much of Europe, the legal age to consume alcohol is 18
If the legal drinking age in the United States was changed back to 18, how would this affect the market for alcoholic beverages? What would happen to the equilibrium price and quantity of alcoholic beverages?
In which of the following scenarios would a predatory pricing scheme have the greatest chance of success, all else constant?
A) The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time. B) The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time. C) The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time. D) The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.