You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC:
As soon as you see the other island's PPC, you realize there are:
A. no gains from trade because there is no difference in your ability to harvest coconuts.
B. gains from trade because your island has a comparative advantage in coconuts.
C. no gains from trade because you both have the same comparative advantage.
D. no gains from trade because the other island has an absolute advantage.
Answer: B
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In the decades before the Civil War, the South __________________________.
A. opposed the extension of slavery into the territories B. supported the extension of slavery into the territories C. cooperated with the North to establish both free and slavery territories D. None of the choices are true
Other things being equal, suppose that the demand for wheat in constant quality units increases. The increase in demand will cause
A) a surplus of wheat. B) a higher equilibrium price and higher equilibrium quantity of wheat. C) fall in the market clearing price of corn, a substitute for wheat. D) a higher equilibrium quantity, but a lower equilibrium price of wheat.
Since resources are abundant, we do not have to make choices about their use
a. True b. False Indicate whether the statement is true or false
The idea behind Say's Law is that people work because:
A. work gives them social status. B. they like to work. C. they want to buy things. D. they want to accumulate wealth.