Suppose Canada and China can both produce cars and airplanes, and Canada has the comparative advantage in the production of airplanes while China has the comparative advantage in the production of cars. Also, suppose China has an absolute advantage in the production of both cars and airplanes. China should


Ans: export cars to Canada and import airplanes from Canada.

Economics

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In the late 1980s, some medical authorities announced that an acne medication named Retin-A had previously unknown wrinkle-reducing properties. An economist would predict that, following this announcement, the price of Retin-A ____ and the quantity sold__.

A. would rise; would decrease B. would rise; would increase C. would fall; would fall D. would fall; would rise

Economics

How do constant returns to scale affect the shape of the long-run average cost curve?

What will be an ideal response?

Economics

There are frequently market solutions that the government can use to deal with externalities

a. True b. False Indicate whether the statement is true or false

Economics

The primary focus of the open-economy macroeconomic model is the determination of GDP and the price level

a. True b. False Indicate whether the statement is true or false

Economics