Why might developing countries hesitate to accept the conclusion that countries should specialize according to their comparative advantage? What dynamic gains might offset their objections?
What will be an ideal response?
Comparative advantage could lock developing countries into their current level of development. However foreign capital, and the ability to learn and accumulate capital as a result of trade could allow development to take place.
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Use the following graph for a competitive market to answer the question below
A price ceiling of $25 per unit will result in
A. a surplus of 200 units. B. the market staying at the equilibrium quantity of 150. C. a shortage of 200 units. D. a shortage of 150 units.
Which is true?
A. A per unit tax levied in an industry with a horizontal demand curve will be all paid by the producer. B. A seller never pays all of a per unit tax no matter what the market conditions. C. A per unit tax levied on the producer in an industry with a horizontal supply curve will be all paid by the producer. D. A producer never pays all of a per unit tax no matter what the market conditions.
The estimated demand for a good is
= 4800 - 16P - 0.65M - 1.5PRwhere Q is the quantity demanded of the good, P is the price of the good, M is income, and PR is the price of related good R. The coefficient on P
A. is negative as dictated by the law of demand. B. violates the law of demand. C. should not be greater than one (in absolute value). D. should have the same sign as the coefficient on PR. E. both c and d
Society must pay the full opportunity cost of any activity
A. that causes costs to rise. B. that uses scarce resources. C. that increases revenues. D. none of these.