If we add together all the gains from specialization and trade and then subtract all the losses, the net result would be
A. Zero: the gains and losses would cancel out.
B. Impossible to tell: the net result could be zero, positive, or negative.
C. Negative: a net loss for the world and each country.
D. Positive: a net gain for the world and each country.
Answer: D
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If August futures for a commodity are currently trading at $9.30/bushel, and you expect the basis in July to be $0.30/bushel over the August futures, then you expect the July cash price to be:
A. $9.05/bushel under August B. $9.55/bushel over August C. $9.00/bushel D. $9.60/bushel
If we say that a price is too high to clear the market, we mean that:
A. quantity demanded exceeds quantity supplied. B. the equilibrium price is above the current price. C. quantity supplied exceeds quantity demanded. D. the price of the good is likely to rise.