"It is possible to restrict imports and still maintain a fixed level of exports." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. If people sell fewer imports to the United States they have less dollars with which to buy United States exports. Since imports ultimately are paid for by exports, a restriction on imports will reduce exports, at least in the long run.
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Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?
A) Is the intervention program economically efficient? B) Does the intervention program reduce pollution to zero? C) Does the intervention program maximize economic surplus? D) Does the intervention program minimize environmental damage?
What is the source of comparative advantage in the Heckscher-Ohlin model?
What will be an ideal response?