As the terms of trade approach the domestic opportunity costs of a product, a country will experience:
A. Smaller gains from trade.
B. Greater comparative advantage from trade.
C. Greater absolute advantage from trade.
D. Greater balance-of-trade surpluses.
A. Smaller gains from trade.
Economics
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Allocative efficiency occurs only at that output where:
A. marginal benefit exceeds marginal cost by the greatest amount. B. consumer surplus exceeds producer surplus by the greatest amount. C. the combined amounts of consumer surplus and producer surplus are maximized. D. the areas of consumer and producer surplus are equal.
Economics
If wages and prices are flexible, then a recession is best eliminated when prices
A. And wages both rise. B. Drop and wages rise. C. And wages both fall. D. Rise and wages drop.
Economics