The principle of comparative advantage indicates that mutually beneficial international trade can take place only when
A. transportation costs are almost zero.
B. tariffs are eliminated.
C. a country can produce more of some product than other nations can.
D. relative costs of production differ between nations.
Answer: D
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Diminishing marginal returns means that the firm definitely is experiencing
A) diseconomies of scale. B) constant returns to scale. C) Both answers A and B are correct. D) Neither answer A nor B is correct.
Which of the following is an example of an institution whose primary concern is global stability?
A) NAFTA (North American Free Trade Agreement) B) OPEC (Oil Producing and Exporting Countries) C) IMF (International Monetary Fund) D) Mekong River Commission E) Asian Development Bank
If average fixed costs equal $60 and average total costs equal $120 when output is 100, the total variable cost must be
a. $40. b. $60. c. $6,000. d. $8,000.
Education yields positive externalities. For example, a more educated population
a. may increase the pace of technological advances, leading to higher productivity and wages for everyone. b. leads to more informed voters, resulting in better government for everyone. c. tends to result in lower crime rates. d. All of the above are correct.