We know that industrial countries tend to trade with other industrial countries. This pattern counters the:
a. preference theory of comparative advantage.
b. factor abundance theory of comparative advantage.
c. concept of intraindustry trade.
d. product life cycle theory of comparative advantage.
e. human skills theory of comparative advantage.
QUESTION 2An isoquant is the locus of the different combinations of inputs that produce the same level of output.
Indicate whether the statement is true or false
QUESTION 3A firm's economic profit is the difference between its total revenue and total costs, including the opportunity costs of the resources used in the business.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4Monopolists, unlike perfectly competitive firms, can continue to earn positive economic profits over time.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Firms in industrial countries find a larger market for their goods in other industrial countries than in developing countries because:
a. the consumption patterns in the industrial countries are highly heterogeneous.
b. the trade policies of the industrial nations are more favorable than the developing countries.
c. the industrial countries tend to have a higher population than the developing countries.
d. the industrial countries are capital intensive countries.
e. the consumption patterns in the industrial countries are more or less uniform.
QUESTION 6Burkes Inc should stop production in the short run if the market price of its product is less than its average total cost of production.
Indicate whether the statement is true or false
QUESTION 7A firm's economic profit includes all opportunity costs incurred by the firm.
a. True
b. False
Indicate whether the statement is true or false
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