The essential logic behind international trade is not different from that underlying trade among different states. Why, then, do we study international trade as a special subject?
There are at least three reasons.
1 . Domestic trade takes place under a single national government, whereas foreign trade always involves at least two governments.
2 . All trade within the borders of one country is carried out in their own currency, whereas trade across national borders involves at least two currencies.
3 . It is much easier for labor and capital to move about within a country than to move from one nation to another.
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When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the
A) substitution effect. B) income effect. C) price effect. D) output effect.
A monopolist can earn a positive economic profit, even in the long run.
Answer the following statement true (T) or false (F)