Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then
A) Chile will produce more computers after trade begins with Brazil.
B) Brazil will produce more timber after trade begins with Chile.
C) Chile will produce more timber after trade begins with Brazil.
D) Brazil will completely specialize in computers once trade begins with Chile.
C
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Budget deficits inevitably lead to inflation in
A) nations that are unable to borrow from the public. B) small nations. C) nations that can easily borrow from the public. D) budget deficits have no effect on inflation.
The average height of a professional basketball player is 6 feet, 2 inches while the average height of a professional jockey is 5 feet. If we translate this information into the context and concepts associated with international trade, we can say that
a. each has an absolute advantage over the other in their professional sport b. because of the height advantage, the basketball player can do both better than the jockey, but has a comparative advantage in basketball c. because of the height disadvantage, the jockey has no absolute advantage d. basketball is a more efficient sport than horse racing e. racing is a more efficient sport than basketball