The concept of free trade is based on the principle that countries should specialize in the production of goods for which the
a. absolute advantage is highest
b. absolute advantage is lowest
c. opportunity cost is highest
d. opportunity cost is lowest
e. consumers have the highest demand
D
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Which of the following is NOT an example of a capital good?
A) a miner's cap B) a GPS tracking device C) a stethoscope D) a U.S. government bond E) an airport kiosk
When production of a good results in an external cost, the unregulated competitive market equilibrium quantity is
A) the efficient level of output. B) greater than the efficient level of output. C) not zero but is less than the efficient level of output. D) unattainable. E) zero.
Refer to Figure 9.6. As a result of this policy, quantity will
A) fall to 300. B) rise to 400. C) stay at 400. D) fall to 400. E) rise to 600.
Which of the following can be considered an income risk?
a. Recession causing loss of pay to employees working in a particular industry b. Fall in employee turnover affecting company profits c. Economic growth resulting in demand-pull inflation d. Stock market boom encouraging investment in risky assets