According to the principle of comparative advantage, a nation should specialize in economic activities
A. for which it has an absolute advantage.
B. for which it has no absolute advantage.
C. that incur lower opportunity costs.
D. that incur higher opportunity costs.
Answer: C
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Suppose an individual has state-independent tastes and invests in risky stocks rather than safe bonds. We can infer that he must be risk loving.
Answer the following statement true (T) or false (F)
When a negative externality exists, the private market produces
A) products at a low opportunity cost. B) less than the economically efficient output level. C) products at a high opportunity cost. D) more than the economically efficient output level.
Which of the following correctly describes the concept of free riding?
a. Making a public good available to all for no cost b. Using a public good but leaving it to others to pay for it c. Encouraging the use of city buses by not charging one day per week d. Using a public good without preventing others from using it
The amount by which a change in government purchases of goods and services is multiplied to determine the change in aggregate demand that it generates is the ...
What will be an ideal response?