Objections to free trade
a. often come from those who are harmed by trade
b. make no sense because everyone benefits from trade
c. usually arise outside of the United States
d. are not economically rational
e. reflect a lack of understanding of the benefits of international trade
A
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Farmer Ken in Kentucky can raise either 80 pounds of tobacco or 40 bushels of cotton on an acre. Farmer Calvin in California can raise either 150 pounds of tobacco or 50 bushels of cotton on an acre. Which farmer can produce tobacco more efficiently?
a. Farmer Ken in Kentucky. b. Farmer Calvin in California. c. The two farmers are equally efficient at growing wheat. d. More information is needed to determine comparative advantage.
According to this Application, after the financial crisis of 2008, Treasury Secretary Timothy Geithner and his staff made a proposal that major banks and financial institutions be subjected to
A) regulation by Congress. B) yearly audits. C) stress tests. D) none of the above.
One way the United States has tried to encourage welfare recipients to acquire human capital is by
A) providing a free college education. B) setting a 1-year limit on temporary assistance. C) tax rebates. D) requiring a adult member of the household to either work or perform community service.
A firm is a price taker if it
A) always sells its output at the industry-determined price. B) takes consumer demand into consideration in setting its price. C) takes its production costs into consideration in setting its price. D) uses a pricing strategy to gain market share.