Answer the following statements true (T) or false (F)
1. If a nation has an absolute advantage over another nation in the production of all commodities, it is not feasible to take advantage of the principle of comparative advantage.
2. Comparative advantage cannot be applied to activities of individuals.
3. Overspecialization and the resulting dependence on one or a few products by a nation can lead to severe economic fluctuations if demand for those products varies widely.
4. In exercising the principle of comparative advantage, a nation with no absolute advantage should produce a commodity in which it faces a lower opportunity cost than its trading partners face.
5. In the long run, a nation cannot overcome a shortage of labor or land.
6. Increasing opportunity costs occur along the production possibilities curve because not all resources are alike in producing different goods.
1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. FALSE
6. TRUE
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The imposition of a quota ________ domestic production, ________ imports, and ________ domestic purchases
A) decreases; increases; decreases B) increases; decreases; increases C) increases; decreases; decreases D) decreases; decreases; decreases E) increases; increases; increases
Early population-control efforts focused on the availability of contraceptives. What factors in developing countries call for more integrated efforts?
What will be an ideal response?
A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,
a. U.S. investment and GDP increase, but German GDP is unaffected. b. U.S. investment and German GDP increase, but U.S. GDP is unaffected. c. U.S. investment, U.S. GDP, and German GDP are unaffected because tractors are intermediate goods. d. U.S. investment, U.S. GDP, and German GDP all increase.
Which of the following might cause the real value of money to rise in an economy?
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