Explain the difference between the theories of absolute and comparative advantage.
What will be an ideal response?
The theory of absolute advantage, first proposed by Adam Smith in The Wealth of Nations, argued that states can maximize their wealth by focusing their activities on the product or products they produced better than other countries, and trading with other states for the rest. The theory of comparative advantage, on the other hand, argued that states should focus on producing the products they themselves did better than they did other products—even if they did not produce these things better than another country.
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To say we regard preferences as “givens” means which of the following?
a. Individuals and groups know what they want. b. Those who create institutions impose or give preferences to others. c. Individuals and groups always disclose their preferences. d. Preferences in society are easily reconciled.
Which of the following third parties ran the most successful campaign for president?
a. Free Soil b. Know-Nothing c. Populist d. Socialist e. Bull Moose