Why does it make sense for economies to specialize according to comparative advantage and trade?
What will be an ideal response?
A person has a comparative advantage in an activity that they can perform at a lower opportunity cost than other people. By participating in the activity in which they have a comparative advantage, less is given up. Because resources are scarce, more can be produced with available resources when less is given up. And, by trading people can consume more than just what they produce.
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An increase in bond prices is usually accompanied by
A. an increase in the opportunity cost of holding money. B. an increase in the quantity demanded of money C. a decrease in the quantity demanded of money. D. an increase in interest rates.
A decrease in the federal funds rate leads to..
What will be an ideal response?
Suppose the domestic supply (QS) and demand (QD) for MP3 players in the United States is represented by the following set of equations:QS = -25 + 10PQD = 875 - 5PThe consumer surplus will ________ by ________ when the United States engages in international trade and the international price for MP3 players settles at $50.
A. increase; $6,000 B. decrease; $7,150 C. decrease; $13,500 D. increase; $2,625
How much is the firm's ATC?
