Why is a small country more likely to gain from international trade than a large country?
a. Because autarkic relative prices in a small country are likely to be quite different from the world relative prices.
b. Because a small country, unlike a large country, does not have the resources it needs to be self-sufficient.
c. Because small countries tend to be specialized in their production, while large countries tend to be diversified.
d. Because a small country is less likely to encounter decreasing returns to scale than is a large country.
a. Because autarkic relative prices in a small country are likely to be quite different from the world relative prices.
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GDP handles household production by
A) estimating a dollar value of the goods purchased to do housework. B) ignoring it. C) including it in real GDP but not in nominal GDP because there are no prices paid for the work. D) estimating a dollar value of the services provided. E) including it in exactly the same way that all other production is included.
Consider a firm that produces 500,00 . units per year. The firm's fixed costs are $100,000 . marginal costs are $250 and the price per unit is $400 . In the short-run, how low can price go before it is profitable to shut down?
a. $150 b. $250 c. $250.20 d. $400
“People who make more money should pay higher taxes” is an example of
A. the benefits principle. B. horizontal equity. C. vertical efficiency. D. the ability-to-pay principle.
The heavy reliance on private health insurance in the U.S. began during World War II, as a:
A. Legal requirement for employment B. Patriotic duty of firms C. Way of imitating European employment practices D. Response by employers to the wage controls in effect then