What is the source of the gains from trade?
What will be an ideal response?
As long as people have different opportunity costs of producing goods or services, total output is higher with specialization and trade than if each individual produced goods and services under self-sufficiency. This increase in output is the gains from trade.
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During the period of rapid industrialization in the U.S. after the Civil War,
(a) real farm incomes fell drastically. (b) real incomes in the agricultural sector increased at a faster pace than real incomes in manufacturing. (c) real incomes in the agricultural sector increased at relatively the same rate as real incomes in manufacturing. (d) real incomes in the agricultural sector increased but at a slower pace than real incomes in manufacturing.
Explain how the prisoners' dilemma can be used to examine pricing strategies in an oligopoly
What will be an ideal response?