Marni’s country is rich in timber and has large sawmills. Carlos’s country has little land, but the government has invested heavily in education and technology. The principle of comparative advantage means that ______.
a. Marni’s country will grow faster than Carlos’s because it has more natural resources
b. both countries will benefit if they each specialize production based on their resources and trade with each other
c. Carlos’s country will have a higher economic growth rate than Marni’s
d. these countries operate on different economic tracks and cannot be directly compared
b. both countries will benefit if they each specialize production based on their resources and trade with each other
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Consider the perfectly competitive firm in the above figure. The profit maximizing level of output for the firm is equal to
A) 0 units. B) 14 units. C) 17 units. D) 19 units.
When there is an interval between when the fiscal policy changes and corresponding changes in aggregate spending, we have a(n)
A) aggregate time lag. B) action time lag. C) recognition time lag. D) effect time lag.
The greater the elasticity of demand for a final product, we find ________ the demand for the factor inputs
A) the greater will be B) the lower will be C) that it will not impact D) The answer cannot be determined.
Refer to the three demand curves for coffee. Which of the following would shift the demand for coffee from D1 to D3?
A. an increase in the number of buyers of coffee B. an expected decrease in the price of coffee in the future C. a decrease in the price of coffee D. an increase in income if coffee is a normal good