The law of comparative advantage indicates that
a. a group of people will reduce their output when each good or service is supplied by the low opportunity cost producer.
b. trading partners lose when they can acquire a good through trade cheaper than they can produce it.
c. trade is most effective when people trade only among those in their own nation.
d. a group of people can increase their output when each good or service is supplied by the low opportunity cost producer.
D
You might also like to view...
Everything else held constant, an increase in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would
a. slope downward b. be horizontal c. slope upward d. slope downward for low output levels and upward for high output levels e. slope upward for low output levels and downward for high output levels
In order to calculate the real deficit, economists need to know the:
A. rate of inflation, the debt, and the nominal deficit. B. rate of inflation and the debt. C. nominal deficit and the rate of inflation. D. rate of inflation, the debt, and the real interest rate.
The market demand for wheat is Q = 100 - 2p + 1pb, where pb is the price of barley. If the price of wheat is $2 and the price of barley is $4, the cross-price elasticity of demand
A) equals (4/100). B) equals (-2/100). C) equals (-4/25). D) cannot be calculated without more information.