A country has a comparative advantage in a good if
A. It can specialize only in two goods.
B. It always has an absolute advantage in the production of the good.
C. It can produce more of the good than another country.
D. It can produce a good at a lower opportunity cost relative to another country.
Answer: D
You might also like to view...
Reducing a tariff will ________ the domestic production of the good and ________ the total domestic consumption of the good
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $75,000. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean and $300,000 if it's polluted. Suppose the law guarantees the farmer access to clean water from the river. Which of the following describes an efficient outcome in this case?
A. The owner of the mill is unable to pay the farmer enough to secure his permission to pollute the river. B. The owner of the mill pays the farmer $87,500 for his permission to pollute the river. C. The owner of the mill pays the farmer $112,500 for his permission to pollute the river. D. The farmer pays the owner of the mill $87,500 to stop polluting.
A problem with the operation of the gold standard in the world economy was that
A) it involved too much government intervention in the economy. B) the world economy was subject to too much inflation. C) a country did not have control of its domestic monetary policy. D) it caused the Great Depression.
Refer to the information provided in Figure 32.2 below to answer the question(s) that follow.
Figure 32.2Refer to Figure 32.2. According to Keynes, a(n) ________ will shift AD1 to the right.
A. decrease in the money supply B. increase in government spending C. increase in taxes D. all of the above