The assumption that the two goods are made using different factor intensities raises the likelihood of incomplete specialization after trade begins
Indicate whether the statement is true or false
TRUE
Explanation: It introduces increasing opportunity costs into the model.
You might also like to view...
Tara buys four music cassettes when the price is $10 and two cassettes when the price is $14 . Her price elasticity of demand is:
a. 0. b. 1. c. 2. d. 3. e. 4.
Which of the following statements describes a surplus?
a. A surplus is the same as an excess demand. b. A surplus occurs when the price is above equilibrium price. c. A surplus occurs when the price is below equilibrium price. d. A surplus occurs when the quantity demanded exceeds the quantity supplied.
A cartel will break down more easily if
A) there are only a few members. B) industry demand is very stable. C) market prices can be observed easily. D) there are many entrants in the industry.
Refer to the information provided in Figure 20.2 below to answer the question(s) that follow.
Figure 20.2Refer to Figure 20.2. the theory of comparative advantage suggests that
A. the United States should export both trucks and cars. B. the United States should import cars and export trucks. C. England should export both trucks and cars. D. England should export trucks and import cars.