In international trade, if a country has a "comparative advantage" in a product this means:
a. it is relatively more efficient than other countries in making the product
b. it is relatively less efficient than other countries in making the product
c. it is equally efficient as other countries in making the product
d. it should import the product rather than export it
Answer: a. it is relatively more efficient than other countries in making the product
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Which of the following is likely to shift the credit demand curve of an automobile manufacturer to the right, assuming all else equal?
A) An increase in the real interest rate B) A plan to increase production and expand to newer markets C) A plan to decrease production and exit from existing markets D) A decrease in the real interest rate
Deadweight loss and market failure are created when a market produces
A) either more or less than the efficient quantity. B) more than the efficient quantity but not when less than the efficient quantity is produced. C) less than the efficient quantity but not when more than the efficient quantity is produced. D) the efficient quantity. E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity.
One reason for the fall in the natural rate of unemployment from 1980 to 2000 is
A) changes in the demographic composition of the work force. B) the decline in inflation. C) increased competition from foreign workers. D) the depreciation of the dollar relative to foreign currencies.
The following is not an example of risk aversion
a. you lock your garage when you have expensive workshop tools b. you are more careful when you buy a more expensive car c. Individuals tend to gamble more with their money when the future is uncertain d. you only go swimming when the lifeguard is on duty