The law of comparative advantage implies that a nation, individual, or region should produce those economic goods for which it
a. has an absolute advantage.
b. is a low opportunity cost producer.
c. is a high opportunity cost producer.
d. pays the highest wage rate.
B
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Other things being equal, what is the effect of deficit spending on credit markets?
A) The supply of credit will increase while the demand for credit remains the same. B) The demand for credit increases while the supply of credit remains constant. C) Both the demand for credit and the supply of credit will decrease. D) Both the demand for credit and the supply of credit will increase.
Short selling is the practice of borrowing stock then selling it with the expectation that its price will fall further so that it can be repurchased and the stock returned to the lender
The difference in the price sold initially and the price that it was subsequently purchased represents profits for short sellers. Discuss the risks taken by such individuals. What kind of risk profile do short sellers exhibit.