The improvement in outcomes that occurs when specialized producers exchange goods and services is called:
A. absolute advantage.
B. specialization.
C. gains from trade.
D. comparative advantage.
Answer: C
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Answer the following statements true (T) or false (F)
1. A major advantage of a partnership is the legal separation of personal and partnership assets. 2. In a corporate form of business enterprise, both profits and dividends are subject to income tax. 3. In determining what and how much to produce, the market economy works in a democratic manner based on dollar votes. 4. Government intervention in market economies was and is necessary to remedy the inequities that evolved from economic liberalism.
Opportunity cost is best defined as the:
a. sum of all alternatives given up when a choice is made. b. money spent once a choice is made. c. highest-valued alternative given up when a choice is made. d. cost of a good minus the satisfaction obtained from consuming it. e. cost of capital resources used in the production of additional capital.
Which of the following is true of sub-Saharan Africa?
a. Sub-Saharan Africa has received very little foreign aid and as a result, the poverty rate in the region is high. b. Sub-Saharan Africa has received more foreign aid than any other region and nonetheless the poverty rate in the region remains high. c. The economic freedom rating of sub-Saharan African countries is high, but the poverty rate in the region is still the highest in the world. d. the reduction in the poverty rate in sub-Saharan Africa has been faster than for other regions of the world during the past quarter of a century.
Without productivity growth, what is the long run the effect of labor migration?
a. There will be an increase in production in the sector using labor (or capital) intensively. b. There will be clear gains to owners of capital versus labor. c. There will be clear gains to labor versus owners of capital. d. There will be a shift of world resources toward the highincome nations.