How do outward-oriented policies affect a nation's productivity?
Most economists believe that poor nations are better off pursuing outward-oriented policies that promote free trade. Countries that use their comparative advantage in trade are, in effect, helping themselves through the gains from trade in the same way that nations that develop new technology raise their standard of living. Hence, a country that eliminates trade restrictions will experience the same kind of economic growth that would occur after a major technological advance. Inward-oriented trade policies are akin to a country choosing to restrict the use of superior technologies.
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If a firm's long-run average cost curve is rising, it is experiencing:
a. a constant return to scale. b. economies of scale. c. diseconomies of scale. d. none of these.
Refer to the graphs. Assume that pizza is measured in slices and beer in pints. In which of the graphs is the opportunity cost of a pint of beer the lowest?
A. Graph A.
B. Graph B.
C. Graph C.
D. Graph D.