Suppose in the country of Nash that the price of corn is $4 per bushel with no trade allowed. If the world price of corn is $3 per bushel and if Nash allows free trade, will Nash be an importer or an exporter of corn?
Nash will be an importer of corn.
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Which of the following statements is FALSE?
a. The rationing function of prices is not allowed to freely operate when the government imposes price controls. b. Price controls may take the form of price ceilings or price floors. c. Price ceilings below the equilibrium price can cause black markets to develop. d. Rent controls are examples of price floors.
A real option can present management with the opportunity to
A) vary output. B) abandon a project. C) postpone a project. D) All of the above
The slope of the consumption function relates changes in consumer spending to changes in disposable income received by consumers. This is called:
a. the marginal propensity to consume. b. the average propensity to consume. c. the utility-maximization function. d. the marginal rate of transformation.
The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.ProductsProduction Possibilities?ABCDECapital Goods01234Consumer Goods22181370Refer to the table above. What is the opportunity cost of producing the first two units of capital goods?
A. 6 units of consumer goods B. 9 units of consumer goods C. 13 units of consumer goods D. 22 units of consumer goods