"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other, only the country with the absolute advantage gains"
Is the previous statement correct or incorrect? Briefly explain your answer.
The statement is incorrect. Absolute advantage, which is essentially the ability to produce more of a good than another country, has nothing to do with the gains from trade. All nations gain from free international trade regardless of whether they possess an absolute advantage or not.
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In the figure above, the poorest 20 percent of households receive ________ of total income
A) 20 percent B) 10 percent C) 5 percent D) 15 percent
Which of the following is false?
a. A true or pure monopoly exists where there is only one seller of a product for which no close substitute is available. b. The situation in which one large firm can provide the output of the market at a lower cost than two or more smaller firms is called a natural monopoly. c. In monopoly, the market demand curve may be regarded as the demand curve for the firm because it is the market for that particular product. d. A monopoly firm is a price maker, and it will pick a price that is the highest point on its demand curve.