World output will be maximized when each country pursues its comparative advantage.
Answer the following statement true (T) or false (F)
True
Total world output is maximized since each country is able to produce at a lower opportunity cost, boosting overall production and incomes.
You might also like to view...
In the simple Keynesian model, equilibrium aggregate output is determined by
A) aggregate demand. B) aggregate supply. C) the national demand for labor. D) the price level.
A trade deficit occurs when:
a. a country imposes a price floor on the good in which it has a comparative advantage. b. a country's imports exceed its exports. c. a country imposes a price ceiling on the good in which it has a comparative advantage. d. a country's exports exceed its imports. e. the domestic product market is in disequilibrium.
The graph above shows a monopolistic competitor
A. in the short run taking a loss.
B. in the short run making a profit.
C. in the long run breaking even.
D. in the long run taking a loss.
If a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular,
A. the farm's owners are likely to withdraw from the industry in order to retire early. B. the firm will continue to earn its "normal profits" far into the future. C. other farmers are likely to plant the same vegetable, pushing up the prevailing market price. D. other farmers are likely to plant the same vegetable, pushing down the prevailing market price.