The difference between absolute advantage and comparative advantage is called gains from trade
Indicate whether the statement is true or false
F
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In order to ensure allocative efficiency on the part of a natural monopoly, regulators would set price equal to marginal cost
a. True b. False
In an oligopoly industry, price:
a. will be lower than the competitive price, due to cost savings. b. will exceed the monopoly price, due to the destructiveness of competitive forces. c. cannot be predicted exactly, because it is likely to lie between the competitive and monopoly prices. d. none of these.
During 2008-2013, the Fed initiated several rounds of "quantitative easing.". Under this policy, the Fed
a. increased its purchases of financial assets and thereby injected additional reserves into the banking system. b. increased its purchases of financial assets, which reduced the reserves available to the banking system. c. reduced its purchases of financial assets and thereby injected additional reserves into the banking system. d. reduced its purchases of financial assets and thereby reduced the quantity of reserves available to the banking system.
When a firm sells a product out of inventory, GDP:
A) increases. B) decreases. C) is not changed. D) increases or decreases, depending on the year the product was produced.