The United States produces both automobiles and computers more efficiently than Mexico. Nevertheless, it is possible that both nations would benefit from trade in these items. The reason for this is
A. the law of comparative advantage.
B. the inflation-unemployment trade-off.
C. externalities.
D. the cost disease of personal services.
E. attempts to repeal the law of supply and demand.
Answer: A
Economics
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When the price elasticity of demand is large, then
a. the product is more likely to be a necessity. b. the responsiveness of quantity demanded to a change in price is small. c. the percentage change in price divided by the percentage change in quantity demanded is large. d. the responsiveness of quantity demanded to a change in price is large.
Economics
Refer to the table. If each of the 100 firms in the industry is maximizing its profit, each must have a marginal cost of:
A. $5.
B. $4.
C. $3.
D. $2.
Economics