Portugal can produce wine and cloth with less labor than England. But, given all factors of production, England can produce cloth relatively better than Portugal. According to Ricardo's theory of comparative advantage, it make sense for England to
What will be an ideal response?
export cloth and import wine from Portugal.
You might also like to view...
Which of the following is a difference between a tax and a subsidy? a. A tax is money paid to the government, while a subsidy is money received from the government
b. There is a deadweight loss associated with a tax, while there is no deadweight loss associated with a subsidy. c. A tax increases quantity supplied, while a subsidy decreases quantity supplied. d. A tax increases consumer surplus, while a subsidy decreases producer surplus
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to fall the same and monetary base to rise. b. Demand for real goods and services to rise and M2 money supply to rise. c. Demand for real goods and services to rise and M2 money multiplier to remain the same. d. Demand for real goods and services to remain the same and M2 money supply to remain the same.
Vic derives less satisfaction from each additional cup of coffee he drinks. Therefore, he will buy added cups of coffee only if ______.
a. the quantity is increased b. the price is reduced c. the quantity is reduced d. the price is increased
An effort by the Fed to reduce aggregate demand may be thwarted because
A) investment could remain the same or increase because of optimistic expectations by businesses about the future of the economy. B) investment and interest rates are positively related. C) investment could fall because of pessimistic expectations. D) taxes may have been increased.