David Ricardo discovered that two countries can still gain by trading even if one country is more efficient in the production of every commodity. Ricardo’s discovery is called the law of
A. comparative advantage.
B. absolute advantage.
C. compensating balances.
D. increasing returns.
Answer: A
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Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
A) The demand for pizzas decreases and the demand for tacos increases. B) The demand for both goods decreases. C) The quantity of tacos demanded increases and the quantity of pizza demanded decreases. D) The quantity of pizza demanded decreases and the demand for tacos increases. E) The demand for each decreases because both are normal goods.
In the market for Canadian dollars measured in US dollars, the demand for Canadian dollars is
a. The supply of Canadian dollars b. The demand for US Dollars c. The supply of US dollars d. None of the above
Oligopolies exist only in industries that produce large durable goods such as automobiles and refrigerators
Indicate whether the statement is true or false
Describe the differences between capitalism and socialism.
What will be an ideal response?