A country can gain by importing a good from abroad even if that good can be produced more efficiently at home. Is this statement true?
What will be an ideal response?
This statement can be true. Such imports make sense if they enable the country to specialize in producing those goods at which it is even more efficient. In determining the most efficient patterns of production and trade, it is comparative advantage that matters. Two countries can gain by trading even if one country is more efficient than another in the production of every good.
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If the number of automobile manufacturers decreases
A) the supply of automobiles increases. B) the demand for automobiles increases. C) the demand for automobiles decreases. D) the supply of automobiles decreases.
The bias in the CPI affects government outlays because the overstatement of inflation
A) means that tax receipts are less than what is needed to cover government outlays. B) decreases government outlays by more than what is justified. C) increases government outlays by more than what is justified. D) decreases social welfare benefits. E) increases fiscal pressure.
The value of a slice of pizza to a consumer is equal to
A) its marginal benefit. B) the maximum price the consumer is willing to pay. C) the consumer surplus. D) Both answers A and B are correct. E) Both answers B and C are correct.
Use supply and demand analysis to explain what is most likely to happen to the price and quantity of corn when there is an increase in the demand for ethanol, which is produced using corn. What other effects would such a change in the corn market have
on the price of beef, the price of farmland, and the price of corn syrup? Please provide the best answer for the statement.