Accounting profit is usually smaller than economic profit
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is a difference between absolute advantage and comparative advantage?
a. Absolute advantage occurs when a country has a lower production cost than its trading partner, while comparative advantage occurs when a country produces a good at a lower opportunity cost than its trading partners. b. Absolute advantage occurs when a country has a higher production cost than its trading partner, while comparative advantage occurs when a country produces a good at a higher opportunity cost than its trading partners. c. In the case of absolute advantage, a country experiences an increase in total surplus post trade, while in the case of comparative advantage, a country experiences no change in total surplus post trade. d. Absolute advantage occurs when a country benefits by exporting a particular good, while comparative advantage occurs when a country benefits by importing a particular good.
A tax
a. lowers the price buyers pay and raises the price sellers receive. b. raises the price buyers pay and lowers the price sellers receive. c. places a wedge between the price buyers pay and the price sellers receive. d. Both b) and c) are correct.
The end of the Cold War is generally marked by the fall of the Berlin Wall in
A) 1961. B) 1969. C) 1979. D) 1989. E) 1994.
When producers do not have to pay the full cost of producing a product, they tend to:
A. Over-produce the product because of a demand-side market failure B. Under-produce the product because of a demand-side market failure C. Under-produce the product because of a supply-side market failure D. Over-produce the product because of a supply-side market failure