A nation can gain from international trade when
a. its relative production costs are the same as those of other countries.
b. it exports goods for which it is a low-opportunity cost producer while importing goods that it could produce only at a high opportunity cost.
c. it imports goods for which it is a low-opportunity cost producer and exports goods for which it is a high opportunity cost producer.
d. it has a trade deficit.
B
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To achieve ________, marginal cost ________ marginal benefit
A) production efficiency; must equal B) production efficiency; must be greater than C) allocative efficiency; must be greater than D) allocation efficiency; must be less than E) allocative efficiency; must equal
Refer to Figure 6-4. The inelastic segment of the demand curve
A) is coincident with the horizontal axis. B) lies below the midpoint of the curve. C) lies above the midpoint of the curve. D) is coincident with the vertical axis.
The real business cycle model best explains the procyclicality of the nominal money supply by
A) an unpredictable Federal Reserve. B) exogenous money. C) endogenous money. D) uncorrelated money.
A horizontal demand curve for a good could arise because consumers
A) are irrational. B) are not sensitive to price changes. C) view this good as identical to another good. D) have no equivalent substitutes for this good.