Resale price maintenance
A) requires a retailer to sell a good no lower than the specified price.
B) is illegal.
C) is the price of a maintenance contract on a good, such as an extended service contract on a car.
D) has a net negative impact on competition.
A
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Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. Which of the following statements is true?
a. Brazil has an absolute advantage in producing only coffee. b. Brazil has an absolute advantage in producing only sugar. c. Chile has an absolute advantage in the production of both coffee and sugar. d. Chile has an absolute advantage in producing only coffee. e. Brazil has an absolute advantage in the production of both coffee and sugar.
A positive value for the cross elasticity of demand between two good implies that these two goods are substitutes.
Answer the following statement true (T) or false (F)
If a nation has a comparative advantage in the production of good X, this means that the nation
A. cannot benefit by producing and trading this product. B. gives up less of alternative goods than other nations in producing a unit of X. C. has a production possibilities curve identical to those of other nations. D. is not subject to opportunity costs in producing good X.
An example of acquired comparative advantage is that
A. the U.S. government provides a subsidy to firms that are trying to increase their exports to other countries. B. the United States imports coffee beans because coffee beans cannot be grown in the United States. C. some U.S. consumers prefer German cars over American cars because German cars have a reputation for being very safe. D. China specializes in the production of labor-intensive goods because of the amount of labor available in the country relative to capital.