Which of the following statements is true?
A) When two nations specialize and trade, there is a loss of efficiency and both the nations are made worse off.
B) Trade between two nations is most beneficial when neither has a comparative advantage in the production of any goods and services.
C) Trade between nations allows each nation to specialize in the production of goods in which it has comparative advantage.
D) Trade between two nations is possible only when the opportunity costs of producing goods and services in both nations are identical.
C
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If the income elasticity of demand for a good is -2.5, then
a. it is a normal good, and its demand curve will shift to the left if buyers' incomes increase b. it is a normal good, and its demand curve will shift to the right if buyers' incomes increase c. it is an inferior good, and its demand curve will shift to the right if buyers' incomes increase d. it is an inferior good, and its demand curve will shift to the left if buyers' incomes increase e. there is insufficient information to determine whether the good is normal or inferior
Which of the following is an opportunity cost of cyclical unemployment?
a. A higher wage rate b. A lower interest rate c. Lower taxes paid by the employed d. Costs of updating prices e. Lost earnings of the unemployed