What is the theory of comparative advantage?
What will be an ideal response?
The theory of comparative advantage was Ricardo's theory that specialization and free trade will benefit all trading partners (real wages will rise), even those that may be absolutely less efficient producers. Comparative advantage refers to instances where an individual or a company can produce something at lower opportunity cost than others can.
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The tangent at point A on a curve has a positive slope. Therefore, the curve has a
A. positive slope at all points. B. positive slope at point A. C. negative slope at all points. D. negative slope at point A.
Refer to Table 18-1. Suppose a series of votes are taken in which each pair of alternatives is considered in turn. If the vote is between allocating funds to education subsidies and increased border security
A) Jasmine and Ivy vote for increased border security, Rose votes for education subsidies, and increased border security wins. B) Ivy and Jasmine vote for education subsidies, Rose votes for increased border security, and education subsidies wins. C) Jasmine and Rose vote for education subsidies, Rose votes for increased border security, and education subsidies wins. D) Ivy and Rose vote for increased border security, Jasmine votes for education subsidies, and increased border security wins.
If Jamal successfully and completely internalizes a negative externality, it follows that
A. transaction costs are zero. B. his marginal private costs are equal to marginal social costs. C. information is asymmetric. D. information is symmetric. E. none of the above
If there are barriers to entry into a market, it is possible for the existing firm(s) to earn positive economic profits. All of the following explain this except:
A) new firms cannot enter to take advantage of the profits. B) resource immobility. C) it is possible for a firm in this situation to charge any price it wants and thus preclude anyone else from entering. D) competition does not erode profits the way it would under perfect competition.