Consider this statement: “The principles of specialization and trade according to comparative advantage among nations also apply to states in the United States.” Do you agree or disagree? Explain.

Would the U.S. government gain any advantage from using tariffs or quotas to restrict imports? Suppose the United States passed a law stating that we would not purchase imports from any country that imposed any trade restrictions on our exports. Who would benefit and who would lose from such retaliation? Now consider above Question in

Suppose a national program of free housing for the elderly is paid for by a sizable increase in income taxes. Explain a trade-off that might occur between economic security and efficiency. Suppose you are a farmer. Explain why you would be motivated to work in traditional, command, and market economies.

Karl Marx believed the market system was doomed. Why do you think he was right or wrong? If all real-world economies are mixed economies, why is the U.S. economy described as capitalist, while the Cuban economy is described as communist? Suppose you are a factory manager. Describe how you might reach production goals under a

1. In a market economy, the three economic questions are answered by which of the following? a. Prices determined by the interaction of the forces of supply and demand.b. A cartel of major transnational corporations, government agencies, and consumer advocates.c. A trilateral commission of major corporations, the military, and elite university professors.d. A central authority

Which of the following represents key strengths of the market economy as a system of allocation? a. Goods and services are allocated based on willingness and ability to pay, rather than based on need.b. Producers have strong incentives to innovate because successful innovators are rewarded with higher profit.c. Since price is freely set based on

Most of the world’s economies are mixed economies because a. a cartel of powerful transnational firms demands it.b. the market system of allocation is always best.c. the command system of allocation is always best.d. government intervention in an overall market system exists because markets fail when there is market power, a great deal of inequality,

QuickLearn Driving School trains learner drivers. The number of candidate drivers it can train per week is given by q= 10 min (k, l )′, where k is the number of vehicles the firm hires per week, l is the number of instructors hired each week, and g is a parameter indicating the returns to

Because firms have greater flexibility in the long run, their reactions to price changes may be greater in the long run than in the short run. Paul Samuelson was perhaps the first economist to recognise that such reactions were analogous to a principle from physical chemistry termed the Le Châtelier’s Principle. The basic idea of

Assume each firm in a perfectly competitive market has an identical cost structure such that long-run average cost is minimised at an output of 20 units (qi= 20). The mini-mum average cost is €10 per unit. Total market demand is given by . a. What is the industry’s long-run supply schedule? b. What is the