Total world output can increase without the addition of resources if
A. countries specialize in the product in which they have an absolute advantage and trade for products in which they have an absolute disadvantage.
B. countries specialize in the product in which they have a comparative advantage and trade for products in which they have a comparative disadvantage.
C. countries impose tariffs on the goods in which they have a comparative advantage.
D. countries replace tariffs with quotas.
B. countries specialize in the product in which they have a comparative advantage and trade for products in
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Suppose the market for dollars is in equilibrium, then the expected future exchange rate rises. What effect does this change have on the current exchange rate?
A) It will rise. B) It will fall. C) It will remain unchanged. D) Because both the supply and demand curves shift, the effect on the exchange rate is unpredictable.
In a market system, employees and suppliers:
A. are usually shielded from risk, but at the cost of not sharing in the profits of the firm. B. are usually shielded from risk and share in the profits of the firm. C. are generally subject to as much risk as firm owners but get to share in the profits. D. bear as much risk as firm owners but don't get to share in the profits.