A nation's comparative advantage in the production of an item is determined by
A. which country has already specialized in production of the item.
B. the total and marginal costs of producing the item.
C. the opportunity cost of producing the item relative to a trading partner's opportunity cost of producing the same item.
D. specialization in the production of all goods.
C. the opportunity cost of producing the item relative to a trading partner's opportunity cost of producing the same item.
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The natural rate of interest is the interest rate that
A) is determined by the intersection of the IS and LM curves. B) equates investment and saving at full employment. C) equates the supply and demand for money. D) is changed only by changes in the money supply.
In the long run, a firm that produces and sells textbooks gets to choose
a. how many workers to hire. b. the size of its factories. c. which short-run average-total-cost curve to use. d. All of the above are correct.
The theory of liquidity preference postulates that the demand for real money balances, plotted against the interest rate, is:
a. vertical. b. downward sloping. c. horizontal. d. upward sloping.
In a cartel, participating members can cheat by
A. letting more entrants join the cartel. B. producing a lower production level than the cartel quota. C. leaving the industry. D. charging a slightly lower price and raising production.