The reason why countries should specialise in producing a certain product for export is explained by:
(a) The Law of Comparative Advantage;
(b) The Law of Absolute Advantage;
(c) Both (a) and (b) above.
(d) None of the above
Answer: (a) The Law of Comparative Advantage;
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In a monopolistically competitive industry, the firms are currently making an economic profit. When this market moves to its long-run equilibrium, the firms' demand curves will have ________ and their economic profit will have ________
A) shifted leftward; decreased to zero B) shifted leftward; decreased but remain greater than zero C) shifted rightward; decreased to zero D) remained the same; decreased to zero
Division of labor means that
A) the labor market in the United States is geographically segmented. B) some employees join labor unions and others do not. C) management and labor are always in conflict. D) the production process is divided into smaller tasks.