According to the theory of comparative advantage; a good should be produced in that nation where
A. the production possibilities line lies further to the right than the trading possibilities line.
B. its cost is least in terms of alternative goods that might otherwise be produced.
C. its absolute cost in terms of real resources used is least.
D. its absolute money cost of production is least.
B. its cost is least in terms of alternative goods that might otherwise be produced.
You might also like to view...
All of the following costs will vary depending on the geographic location of a firm's plant except which one?
A) land prices B) U.S. corporate taxes C) wages D) local taxes
The era of deregulation began as a result of the government's failed response to the oil price shock of 1973.
Answer the following statement true (T) or false (F)
Marginal revenue is the
A. added revenue that a firm takes in when it increases output by one additional unit. B. additional profit the firm earns when it sells an additional unit of output. C. ratio of total revenue to quantity. D. difference between total revenue and total costs.
Many economists agree that government should deal with monopolists on a case-by-case basis. Policy options include the following, except:
A. If the monopoly is attained and maintained through anticompetitive behavior, the government can file a suit based on antitrust laws B. If the firm is a natural monopoly, the government may decide to regulate its prices and operations C. If the monopoly is maximizing economic profits, the government should subsidize new firms to enter the industry D. If the monopoly is subject, and vulnerable, to potential competition, the government can decide to leave it alone