The law of comparative advantage applies to exchange between
a. individuals.
b. regions.
c. nations.
d. all of the above.
D
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Refer to the figure above. If the economy of Barylia opens up to free trade, then which of the following statements is true?
A) Barylia will start importing calculators. B) Barylia will start exporting calculators. C) Domestic consumers will purchase a greater quantity of calculators than before. D) The production and purchase of calculators within Barylia will remain the same as before.
The figure above illustrates a linear demand curve. In the price range from $8 to $6, demand is ________ and in the price range $4 to $2, demand is ________
A) elastic; elastic B) elastic; inelastic C) inelastic; elastic D) inelastic; inelastic
Suppose the price of one euro is fixed at $1.00. A Dutch oil company discovers new oil reserves in the North Sea and offers the oil for sale. If a flexible system is allowed, then what is the impact on the foreign exchange rate?
a. A dollar becomes worth one euro. b. The euro depreciates relative to the dollar. c. A dollar becomes worth two euros. d. The euro appreciates relative to the dollar.
Which of the following is LEAST likely to occur as a result of a slowdown in the growth rate of the U.S. working age population?
A. Businesses will struggle to find enough skilled workers among American workers. B. The government will find that it is harder to pay for Social Security benefits. C. Workers in the United States will feel increased pressure to pursue a college education. D. Payroll tax revenues will increase as the number of retirees falls.