Why might a nation that has an absolute advantage in the production of a good or a service still not be able to find a trading partner?
What will be an ideal response?
The reason is that even though this nation has an absolute advantage in the production of this good it may not have a comparative advantage in its production.
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Suppose that the exchange rate between Mexican pesos and dollars is 8 pesos per dollar. If the exchange rate goes to 6 pesos per dollar, it would tend to: a. decrease U.S. exports to Mexico
b. increase U.S. exports to Mexico. c. increase Mexican exports to the United States. d. both (a) and (c)
A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?
a. the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing b. the tradeoff between production of jewelry and production of clothing c. the opportunity cost of clothing in terms of jewelry d. the effect of economic growth on production possibilities involving jewelry and clothing
From pre-World War II years to the early 1980s, which one of the following countries was the principal lender in the world?
A. Germany B. Japan C. The United States D. The United Kingdom
According to the above table, the equilibrium price of earbuds is
A. $16. B. $10. C. $12. D. $14.