Consider two goods--one that generates external costs and another that generates external benefits. The actual market outcome would
a. result in output that is lower than the efficient output for both goods.
b. result in output that is higher than the efficient output for both goods.
c. result in output that is lower than the efficient output for the good with an external benefit and output that is higher than the efficient output for the good with an external cost.
d. result in output that is higher than the efficient output for the good with an external benefit and output that is lower than the efficient output for the good with an external cost.
C
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Suppose that the Home country in the twosector (manufacturing and agriculture) specificfactors model has a comparative advantage in manufacturing output. What will happen to the amount of land used in producing agricultural output when trade occurs?
a. It will fall. b. It will rise. c. It will not change. d. It will first fall, then rise.
Government production accounts for about half of all GDP in the United States.
Answer the following statement true (T) or false (F)