The first example used to explain comparative advantage used two countries (England and Portugal) and two goods (wine and cloth) to show that
A) each country would be better off from trade if it had an absolute advantage in producing one of the goods.
B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage.
C) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods.
D) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods.
D
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The owner of a good has the right to decide how that good is used and to restrict others from using that good. This idea is known as:
a. the principle of mutual excludability. b. the principle of comparative advantage. c. the principle of public ownership. d. the principle of negative externalities. e. the law of demand.
Which of the following is a valid reason to consider government regulation?
a. Seeking some social objective that markets do not achieve. b. Fear that capitalism will prove too productive. c. Desire on the part of government to be useful. d. Requests for protection from an industry. e. All of the above.