Suppose the South had won the Civil War, and trade no longer took place between Northern and Southern states. Explain whether the sum of the North and South GDPs would have been higher or lower than with the current United States.
What will be an ideal response?
North and South added together would have a lower GDP than the United States. Intrastate trade adds to GDP by allowing specialization. Prohibiting trade among the states would force Northern states to grow their own agricultural products and Southern states to produce their own manufactured goods.
You might also like to view...
Which of the following is NOT an example of ways in which microeconomic analysis can help Toyota Motor Corporation in its corporate decision making?
A.Forecasting demand for new automobiles B. Determining how many automobiles to produce in order to maximize profits C. Forecasting the effect of an oil price increase on demand for hybrid autos D. Predicting how competitors will react to the firm's pricing strategy E. Forecasting the effect of Toyota's hiring patterns on the U.S. unemployment rate
Oligopolies can result from any of the following EXCEPT
A) economies of scale. B) vertical mergers. C) government regulation. D) diseconomies of scale.