Trade among nations is ultimately based on
a. absolute advantage.
b. strategic advantage.
c. comparative advantage.
d. technical advantage.
c
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In 2000, you could buy a Cadillac DTS for $45,000. In 2011, the Cadillac DTS sold for $55,000
While both models include anti-lock brakes and air bags (along with other similar features), the 2011 model also includes satellite radio and new technology that provides improved gas mileage and safer driving. If the Cadillac DTS was included in the CPI basket, it would create A) a downward bias in the inflation rate. B) an upward bias in the CPI as a result of quality change bias. C) an upward bias in the CPI as a result of commodity substitution bias. D) a downward bias in the CPI as a result of new goods bias.
You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A) a reduction in sales taxes B) a reduction in taxes on luxury yachts C) an investment tax credit D) all of the above
Can a firm experience diminishing returns in the long run?
What will be an ideal response?
Which of the following is a market incentive to discourage pollution?
A. User charges and government regulation. B. Emission charges and user charges. C. Command-and-control options. D. The greenhouse effect.