The assumption of diminishing returns in the Heckscher-Ohlin model means that, unlike in the Ricardian model, it is likely that
A) countries will not be fully specialized in one product.
B) countries will benefit from free international trade.
C) countries will consume outside their production possibility frontier.
D) comparative advantage will not determine the direction of trade.
E) global production will decrease under trade.
A
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If there are 10,000 people in your age bracket, and 10 of them died last year, an insurance company believes that the probability of someone in that age bracket dying this year would be
A) 0. B) .001. C) .0001. D) 1,000.
The designation "natural" implies that the natural rate of unemployment
a. is desirable. b. is constant over time. c. is impervious to economic policy. d. does not go away on its own even in the long run.
Since the government has been paying out farm subsidies
A. the number of family farms has increased by about 40 percent. B. the number of family farms has increased by 10%. C. the number of family farms has decreased by 10%. D. the number of family farms has decreased by 70 percent.
A government tax on luxury goods may have unintended negative effects because ______.
a. subsidies are more effective incentives than taxes b. use taxes are less profitable than income taxes c. the tax might reduce consumption of those goods d. the tax would redistribute income more unevenly