If country A produces S at a lower relative price than country B, ...

[Mr3Hunna]

If country A produces S at a lower relative price than country B, A is said to have a comparative advantage in S.
 
  Indicate whether the statement is true or false

Question 2

All of the following involve a moral hazard problem EXCEPT
 
  A) an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto.
  B) the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems.
  C) making regular visits to your doctor because you know that you have full healthcare coverage.
  D) the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank.
  E) membership in FDIC (Federal Deposit Insurance Corporation) by your local bank.

[ally]

Answer to Question 1

TRUE

Answer to Question 2

D

[Mr3Hunna]

Excellent

[nyrave]

TYSM