Two countries will choose to specialize and trade only if:
A. the terms of trade fall between their opportunity costs for producing the goods on their own.
B. the opportunity costs are the same for the two nations.
C. one country possesses the absolute advantage in both goods, but the comparative advantage in only one good.
D. the opportunity costs are astronomically high for producing the goods on their own.
Answer: A
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Which answer below CORRECTLY describes the relationship between the demand for labor curve and the value of marginal product curve?
A) The curves intersect to determine the equilibrium quantity of labor. B) The value of marginal product curve lies to the right and above the demand for labor curve. C) The curves are the same. D) The value of marginal product curve lies to the left of the demand for labor curve.
The expectation of future devaluation causes a balance of payments crisis marked by
A) a sharp rise in reserves and a fall in the home interest rate below the world interest rate. B) a sharp fall in reserves and an even bigger fall in the home interest rate below the world interest rate. C) a sharp fall in reserves and a rise in the home interest rate above the world interest rate. D) a sharp rise in reserves and an even greater rise in the home interest rate above the world interest. E) a sharp rise in reserves and a rise in the home interest rate to the level of the world interest.
An investment pays $1,500 half of the time and $500 half of the time. Its expected value and variance respectively are:
A. $2,000; (250,000 dollars)2 B. $1,000; 250,000 dollars C. $1,000; 250,000 dollars2 D. $1,000; 500,000 dollars
To remain in consumer optimum
A. a price decrease requires an increase in consumption. B. prices must remain static. C. a price decrease requires a decrease in consumption. D. a price increase requires an increase in consumption.