When the principle of comparative advantage determines trade, then a country will
A) specialize only in that good with the highest opportunity cost.
B) specialize only in goods with the lowest opportunity costs.
C) specialize only in that good where output is less per worker hour than another country.
D) specialize only in that good where production costs are more than average total costs.
Answer: B
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The capture theory of regulation implies that
A) regulations promote the attainment of efficiency. B) regulations promote the attainment of economic profit. C) public officials favor voters over producers. D) the demand for regulation is less elastic than the supply.
A government policy that allows retirement savings to accumulate tax-free is an example of a policy to promote economic growth by:
A. increasing physical capital. B. increasing human capital. C. increasing the availability of natural resources. D. improving technology.
If the marginal propensity to consume (MPC) is 0.75, a $50 decrease in government spending, other things being equal, would cause equilibrium real GDP to:
A. increase by $50. B. decrease by $50. C. increase by $200. D. decrease by $200.
The most important determinant of a household's consumption spending is _____
Fill in the blank(s) with the appropriate word(s).