Suppose that labor is the only productive resource needed. Scotland has a comparative advantage in producing firewood, while Iceland has a comparative advantage in producing wool. If the two nations trade with each other,
A. Scotland should export wool and Iceland should export firewood.
B. Scotland should export both wool and firewood.
C. Scotland should export firewood and Iceland should export wool.
D. Iceland should export both wool and firewood.
C. Scotland should export firewood and Iceland should export wool.
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Economic reasoning implies that economic agents will make decisions:
A) by random selection. B) by comparing the costs and benefits of various options. C) solely on the basis of tastes and preferences for various options. D) by replicating the choices made by other economic agents.
The above table shows answers given by people interviewed in a government survey of households. Which individual or individuals are considered marginally attached?
A) A B) B, C, and D C) A and D D) D
If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia
a. should import coffee. b. has a comparative advantage in coffee and should export coffee. c. should produce just enough coffee to satisfy domestic demand. d. should produce no coffee domestically.
In a capitalist country most resources are owned by
A. business firms. B. households. C. the government.