During a period when new entrants are being attracted to an industry, we would expect that:
a. economic profits are positive.
b. as a result, economic profits are falling.
c. as a result, economic profits are rising.
d. both (a) and (b) are true.
Question 2
A country can benefit by indulging in international trade when:
a. it produces a good in which it has an absolute disadvantage.
b. it produces a good in which its trading partner has an absolute advantage.
c. it produces a good in which it has a comparative advantage.
d. it produces all the goods which are supported by its resources.
e. it produces nothing and merely depends on foreign imports.
