Critically evaluate the following statement. "I am definitely in favor of free trade but only if it means fair trade."
What will be an ideal response?
Much of the time arguments like this are really disguised arguments against free trade. The only way for free trade to work is if it makes both parties better off. Otherwise, there would be no point in trading. Making both parties better off than they were before seems fair. However, it might not benefit both parties by the same amount which is most often the case in trades of any kind. So if the definition of fairness in free trade is narrowed to only include trades that provide the same net benefit to all parties than it is likely this will mean that trade won't happen at all.
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If a good is not produced, then there is no demand for it
Indicate whether the statement is true or false
If a firm makes negative short run profits, it will exit the industry in the long run.
Answer the following statement true (T) or false (F)
According to the Ricardian model, the source of comparative advantage is:
a. differences in labor productivity in the different countries. b. differences in foreign trade policies followed by the governments of the various countries. c. differences in resource endowments of the economies. d. differences in the fields of research and development in the countries. e. differences in the taste and preferences of the consumers in the different countries.
In a typical production function, the relevant factors of production are land, labor, capital, and
A. resources. B. raw materials. C. technology. D. entrepreneurship.