In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue and Fred can gain from trade if Sue changes the ________ and Fred changes the ________
A) tires; oil
B) oil; oil
C) oil; tires
D) tires; tires
A
You might also like to view...
Compensation of losers from opening an economy to international trade is not common because:
A) losers don't lose so much that they would require to be compensated. B) the loss is made up through the availability of a wider array of goods and services. C) it is difficult for governments to carry out such compensation policies. D) the government will have to transfer huge amounts of money to compensate losers.
If the price of gasoline increases and the price of food remains the same, then real income measured in terms of
A) gasoline increases. B) gasoline decreases. C) food increases. D) food decreases.
The horizontal intercept of the budget line is:
A. M/PY. B. -PX/PY. C. M/PX. D. PYY.
If some firms internalize their external costs by being a cleaner and more "environmentally friendly" producers than other firms that do not, then which of the following best describes this situation?
A. The environmentally friendly firm will be operating at a lower marginal and average cost than those firms that shift some costs to society in the form of external costs. B. In a long-run competitive equilibrium in which consumers do not distinguish between environmentally friendly and standard producers, the environmentally producers will receive negative economic profits and be forced to change or exit. C. Without regulations requiring firms to internalize their external costs, environmentally friendly producers will earn positive economic profits even without consumers paying them a higher price than standard producers. D. Standard firms will have an incentive to shift their production to an environmentally friendly process.