Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. Also assume that Germany has an absolute advantage in both fish and cars. If these two countries specialize and trade so as to maximize the benefits of specialization and trade, then
a. the two countries' combined output of both goods will be higher than it would be in the absence of trade.
b. Greece will produce more fish than it would produce in the absence of trade.
c. Germany will produce more cars than it would produce in the absence of trade.
d. All of the above are correct.
d
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Which of the following is an example of lower production costs brought about by the use of technology?
a) the delivery costs of gasoline to the consumer by diesel trucks b) the use of e-mail to replace slower surface mail c) the making of breads and pastries in local shops rather than large bakeries d) the importing of fresh vegetables from South America rather than using canned vegetables
What is the free-rider problem? What results from the free-rider problem? What is a solution to the free-rider problem?
What will be an ideal response?