According to comparative advantage, a nation should
A) Specialize in the production of the good with the least disadvantage.
B) Not import any goods if it does not have a relative disadvantage.
C) Import only the goods where the nation has a disadvantage.
D) Not produce any goods if the nation is at relative disadvantage.
Answer: A
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A collusion can work if ________
A) a colluder can cheat without being detected B) a colluder values future monopoly profits more than current profits C) a colluder charges a price higher than his partners D) a colluder gives secret price discounts
Collusion can earn higher prices and higher profits under the Bertrand model, but why is this an unlikely outcome in practice?
A) Firms prefer to remain independent of other firms so that their pricing plans can be more flexible over time. B) The collusive firms have an incentive to gain market share at the expense of the other firms by cutting prices. C) The federal antitrust authorities have an easier time catching firms that collude on price rather than quantity. D) none of the above
An example of a capital resource is: a. stock in a computer software company
b. a bond issued by a company selling electric generators. c. a dump truck. d. an employee of a moving company.
An increase in the money supply will lower the equilibrium rate of interest.
a. true b. false