If a country is currently producing at a production point such that the trade line has a slope that is flatter than the slope of the PPC at the same point, then
A) the country can get greater gains from trade if it moves production away from the good on the vertical axis.
B) the country can get greater gains from trade if it moves production toward the good on the vertical axis.
C) the country cannot improve on its gains from trade.
D) There are no gains from trade in this example.
B
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Keynesian economists argue that monetary policy works through its effects on:
a. interest rates and investment. b. price- and wage-flexibility. c. budget deficits and trade deficits. d. the spending and money multipliers.
In deciding to produce more agricultural goods and fewer manufactured goods, a society is addressing the question of
a. where on its production possibilities frontier to operate b. what production methods should be used to produce goods and services c. how will output be allocated among the individuals in the society d. what prices will be charged for goods and services e. the optimal degree of central planning
When insurance companies set premiums, they are more likely to assess risk ______.
a. based on group averages b. based on an individual basis c. by assigning risk equally to all drivers d. by ignoring the idea of moral hazard
The quantity theory of money concludes that if real output is constant:
A. changes in velocity are proportional to changes in nominal income. B. changes in the price level are caused by changes in the money supply. C. real GDP and the money supply are related in the long run. D. changes in velocity are proportional to changes in the money supply.