Which of the following statements about international trade is true?
A) Potentially, a country can have absolute advantage in all goods.
B) Potentially, a country can have relative advantage in all goods.
C) After trade, countries tend to specialize in the production of those goods in which they enjoy absolute advantage.
D) None of the above is true.
A
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Starting from long run equilibrium, in response to a decrease in AD: a. The price level will increase more in the long run than in the short run
b. The short run equilibrium level of real output will be greater in the long run than in the short run. c. Neither the price level nor real output will change in the long run. d. Both a. and b. are correct
In a decreasing-cost industry:
A. there will be no firm entry because the increased supply will reduce the long-run equilibrium price. B. the law of demand does not apply. C. greater demand leads to higher long-run equilibrium prices. D. lower demand leads to higher long-run equilibrium prices.
Empirical studies suggest that when a large number of firms are present in a market, prices are usually ________ and profits are usually ________ than when there are only a few firms in a market.
A. lower; higher B. lower; lower C. higher; higher D. higher; lower
Which of the following will occur if the supply curve for gasoline shifts to the left?
A. Nothing will happen to the quantity of gasoline used because people are addicted to gasoline. B. The demand for gasoline will shift to the left as people demand less gasoline. C. The price of gasoline will fall, and the quantity demanded will rise. D. The price of gasoline will rise, and the quantity demanded will fall.