In Zombia, it takes 10 resources to produce 1 ton of cocoa and 13.5 resources to produce 1 ton of rice. In South Curmudgea, it takes 40 resources to produce 1 ton of cocoa and 20 resources to produce 1 ton of rice. Zombia has a comparative advantage over South Curmedgea in cocoa. This follows the theory of comparative advantage, and we can say that engaging in free trade benefits all countries that participate in it. Which of the following is an inaccurate assumption on which this conclusion is based?

a. We have assumed that agrarian nations do not specialize in fertilizers.
b. We have assumed constant returns to scale.
c. We have assumed the prices of resources and exchange rates in the two countries are dynamic.
d. We have assumed diminishing returns to specialization.
e. We have assumed there are barriers to the movement of resources from the production of one good to another within the same country.

Suppose jamal purchases a pair of running shoes online for $60. if his state has a sales tax on clothing of 6 percent, how much is he required to pay in state sales tax?

Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers. firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?

Crowding out is a phenomenon focused upon most by the macroeconomists of whereby a government deficit interest rates, which in turn private investment spending. this group also believed that fiscal policy is the only thing that can lower natural unemployment. is just as effective in countering recessions as monetary policy. can be used most of the time, but monetary policy becomes a better option when velocity is fluctuating. should be used only if the central bank follows a monetary policy rule. faces problematic lags in propagating changes throughout the economy.