Which of the following is true?
i. Comparative advantage drives international trade.
ii. Compared to a no-trade situation, in a market with imports, producer surplus is larger.
iii. Tariffs lower the domestic price of imported goods.
A) only i
B) only ii
C) only iii
D) i and ii
E) i and iii
A
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If people begin to favor science fiction novels to a greater degree than previously, the demand curve for science fiction novels
A) shifts rightward. B) shifts leftward. C) stays constant. D) can shift either rightward or leftward.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Assuming both countries have the same amount of resources available to them, which of the following statements is true? Country A has:
A. the absolute advantage in neither the production of cars nor trucks. B. an absolute advantage in the production of cars, and Country B has the absolute advantage in the production of trucks. C. an absolute advantage in the production of trucks, and Country B has the absolute advantage in the production of cars. D. the absolute advantage in the production of both cars and trucks.