If Country A has an absolute advantage over Country B in the production of every commodity,
a. mutual gains from trade between Country A and Country B would be impossible.
b. Country B would be able to gain from trade but not country A.
c. the joint output of the two countries could not be increased through specialization and exchange.
d. mutual gains from trade would still be possible.
D
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Government-imposed limits on price movements are likely to
A. increase economic efficiency. B. decrease economic efficiency. C. leave economic efficiency unchanged. D. promote economic growth in the economy.
The combinations of gasoline and coffee along one of Sam's indifference curves are combinations
A) which require the same total expenditure. B) that he can afford with his $60.00 income. C) among which he is "indifferent." D) that give him the same marginal rate of substitution.
The theory of "rational expectations" is most closely associated with __________ economists
A) Classical B) Keynesian C) Monetarist D) New Classical
Suppose the average total cost of producing semiconductors in a factory of a particular size declines over time as more semiconductors are produced. This drop in average total cost might best be explained by:
A. economies of scope. B. economies of scale. C. diminishing marginal productivity. D. learning by doing.