The law of comparative advantage states that
A. countries grow fastest if exports exceed imports, with payment surpluses being received in gold.
B. mutually beneficial trade can always take place between two countries whose pre-trade relative opportunity costs differ.
C. two countries can both gain from trade only when they have very different tastes and preferences.
D. trade benefits a country only if it has comparative advantages in all goods and services.
B. mutually beneficial trade can always take place between two countries whose pre-trade relative opportunity costs differ.
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The target zone model of exchange rates requires adjustment for
A) imperfect policy credibility and intra-marginal adjustments. B) imperfect policy credibility. C) speculative pressure and intra-marginal adjustments. D) speculative pressure.
The result for the seller of being able to practice price discrimination will be
A) higher profits. B) lower demand elasticity. C) lower quantity sold. D) cost minimization.
Exhibit 6-15 Long-run average cost
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If the firm represented in Exhibit 6-15 is operating with a plant whose size corresponds to short-run average total cost curve A, the level of output that would minimize its short-run average total cost is:
A. 500 units per week. B. 1,000 units per week. C. 1,500 units per week. D. 2,000 units per week.
Which one of the following is a source of conflict between owners and managers?
A. Managers are reluctant to lay off their friends and want to empire-build. B. Owners are reluctant to lay off their friends and want to empire-build. C. Managers are often reluctant to increase the size of the firm. D. Owners are reluctant to lay off the manager and want to empire-build.