The theory of comparative advantage explains that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost.
Select whether the statement is true or false.
A. True
B. False
A. True
This statement is true. The theory of comparative advantage explains that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost.
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In the Bertrand model with homogeneous products,
A) the firm that sets the lower price will capture all of the market. B) the Nash equilibrium is the competitive outcome. C) both firms set price equal to marginal cost. D) all of the above E) the outcome is inconclusive.
Burritos and margaritas are priced at $3 and $5 each, respectively. If the marginal utility of the last burrito is 15 utils, then, in consumer equilibrium, the marginal utility of the last margarita is:
a. 15 utils. b. 20 utils. c. 25 utils. d. 30 utils