Suppose the United States can produce either 15,000,000 cars or 20,000,000 bottles of wine in a year and France can produce 10,000,000 cars or 18,000,000 bottles of wine in a year. This implies that:
a. the United States has a comparative advantage in the production of wine.
b. France has a comparative advantage in the production of cars
c. the United States has an absolute advantage in the production of cars.
d. France has an absolute advantage in the production of wine.
c
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Which of the following is false?
A) International differences in tastes, if sufficiently large, could overturn the comparative advantage predictions of the HO model. B) The classical and HO models make similar assumptions about international differences in technology. C) The HO model predicts that some groups will be hurt by international trade. D) Both the classical and the HO models predict that countries gain from international trade.
Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near-extinction of the wild rhinoceros. What do these problems have in common?
a. Private markets could easily solve them if governments left the markets alone. b. They would all go away if the government sponsored an intensive public-information campaign. c. They are all the result of a failure to establish clear property rights over something of value. d. They are all the result of a failure of corrective taxes.
The price system features
A) exchanges made in currency only. B) voluntary exchange that makes both the consumer and producer better off. C) exchanges made only on a barter basis. D) an exchange in which consumer is made better off and the producer is made worse off.
If European economies experience a period of sustained recession and the United States does not, what will happen in the United States?
A. An increase in aggregate supply B. A decrease in aggregate supply C. A decrease in aggregate demand D. An increase in aggregate demand