The fundamental force driving international trade is comparative _______
A. advantage: a country exports those goods that have high prices
B. abundance: the country that produces more than it needs exports the good
C. advantage: the country with the lower opportunity cost of production exports the good
D. cost: a country trades with other countries that produce cheaper goods
C Trade according to comparative advantage maximizes the gains from trade.
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A example of a good with external benefits is
A) a pizza. B) a dose of flu vaccine. C) a sewing machine. D) an imported good. E) a pair of running shoes.
In the ultimatum game, one reason players don't choose the rational offer is
A) that there are too many possible outcomes to reasonably consider. B) they are worse off by taking the offer. C) they prefer to sacrifice to punish "unfair" behavior. D) that it is not a Nash equilibrium.