The effect of opening trade between countries is
a. living standards rise in the country with efficient, high-pay workers.
b. both countries can exploit comparative advantage and increase productivity.
c. total world production increases as both countries specialize in specific goods.
d. All of the above are correct.
d
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Explain the concept of "crowding out" in a closed economy
What will be an ideal response?
Under laissez faire, the allocation of scarce resources among the different industries
a. is possible only with government tax and subsidy policies. b. is accomplished by the price system. c. requires a considerable amount of central planning. d. is the result of consumer planning.
Which of the following cause-effect statements predicts an outcome that is uncertain?
a. If a car travels 62 miles in an hour, it will reach a city 58 miles away in less than an hour. b. If the comet continues at its current speed, it will reach the earth’s atmosphere in two days. c. If I write every day, I will become a best-selling novelist. d. If I heat an ice cube, I’ll create water.
Corrina was working as a waitress in an Italian restaurant making an annual income of $25,000 per year when she decided to start up her own catering business. Corrina used $10,000 of her savings that was earning 5 percent annual interest to establish her
business. After the first year she made an accounting profit of $20,000. Her economic profit was A) -$5,550. B) -$5,000. C) $20,000. D) $25,000.