If a country exports the products it can produce at a low opportunity cost and imports the products it would otherwise produce at a high opportunity cost, we say that such trade is based on the
A. arbitrage pricing theory.
B. theory of absolute advantage.
C. theory of factor endowments.
D. theory of comparative advantage.
Answer: D
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Investment is a smaller component of GDP than consumption, but it is a more stable component
Indicate whether the statement is true or false
Molly just graduated from high school. The figure shows her possibilities frontier. If Molly goes to college, she will move from point M to point K. In terms of consumption goods, Molly's opportunity cost of going to college is
A) MK. B) OL. C) KL. D) LM.
An efficient price is a price set at:
A) marginal cost. B) opportunity cost. C) average fixed cost. D) average variable cost.
An increase in the money wage rate shifts the short-run aggregate supply curve ________; an increase in technology shifts the long-run aggregate supply curve ________
A) rightward; rightward B) rightward; leftward C) leftward; rightward D) leftward; leftward