If a country has a comparative advantage in wine moved from autarky to free trade, this would cause what reaction in the world market?
A. Domestic wine consumers would be opposed.
B. Domestic wine consumers would not be influenced.
C. Foreign wine producers would be opposed.
D. Domestic wine producers would be opposed.
Answer: D
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The real balance effect (wealth effect), the interest rate effect, and the net exports effect all help to explain the:
a. decrease in supply in the loanable funds market. b. large federal budget deficit. c. increase in short-run aggregate supply. d. downward-sloping aggregate demand curve.
Analysis of the economic status of poor people reveals that
a. most are poor because they did not have the opportunity to obtain training and a quality education. b. most had poor parents, grandparents, and great-grandparents, suggesting that poverty is inherited. c. the poverty population is very homogeneous regarding opportunity, cultural disadvantages, alcoholism, and other personal contributing factors. d. poverty is a complex issue; the poor are a heterogeneous population, and the causes of poverty are multidimensional.
The rent paid for the pasture land used to graze cattle would increase if:
A. the productivity of the land increased. B. people decided to consume more beef. C. oil deposits were discovered on the land. D. any of these occurred.
Trade that is within a country or between countries is based on the principle of
A) absolute advantage. B) scarcity. C) competition. D) comparative advantage.