The law of one price means that prices eventually will be the same in all countries and eventually countries will not have a reason to trade.
Answer the following statement true (T) or false (F)
False
Although the law of one price means that prices eventually will be the same in all countries, this happens because countries do trade. As long as the comparative advantages differ, there is a reason to trade. Multiple Choice Questions
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Which of the following describes comparative advantage?
A) To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn. B) Company A can produce 4 boxes of cereal in a day whereas Company B can produce 5 boxes of cereal in a day. C) Firm A can produce a good at a cost of $3 and Firm B can produce the good at a cost of $4. D) Jane can type 50 words per minute and Joe can type 60 words per minute.
The figure above shows the marginal revenue and costs of a perfectly competitive firm. When the firm produces 170 units
A) marginal cost is less than marginal revenue. B) marginal revenue equals marginal cost. C) total revenue is less than total cost. D) total revenue equals total cost.
Which of the following is correct? Since 1950
a. U.S. exports and U.S. imports each about doubled. b. U.S. exports and U.S. imports each about tripled. c. U.S. exports about doubled and U.S. imports about tripled. d. U.S. exports about tripled and U.S. imports about doubled.
The Agriculture industry is often used as an example of a competitive market model. However, of the four conditions required for perfect competition, one is clearly not present in farming. Which one is the least applicable and why does it not fit the model?
What will be an ideal response?