Suppose that the citizens of South Dakota decided to limit imports of citrus fruit from Florida and California on the grounds that climatic differences give those two states an unfair advantage in the production of those products. How would the analysis used to explain international trade apply?
The analysis is identical. If nations and persons benefit from specializing where they have comparative advantage (derived from whatever source), then states within the United States also benefit. In fact, the United States as the world's first free trade zone, is the strongest evidence that can be offered that free trade benefits all participants.
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The income elasticity of demand is the percentage change in the ________ divided by the percentage change in ________
A) quantity demanded; the price of a substitute or complement B) quantity supplied; price C) quantity demanded; price D) quantity demanded; income E) quantity demanded when income changes; the quantity supplied
In the economic way of thinking, traffic congestion is a sign of
A) a surplus of people. B) a surplus of automobiles. C) a shortage of buses. D) a negative externality.