Author Question: The mercantilist school of thought posits that states can maximize their wealth and welfare by a. ... (Read 499 times)

formula1 · **on:** Sep 3, 2018

The mercantilist school of thought posits that states can maximize their wealth and welfare by

a. playing an active role in the economy and accumulating resources.
b. letting the invisible hand control economic decisions.
c. opening trade borders and removing barriers to trade.
d. focusing on industries in which they have a comparative advantage.

Question 2

Which of the following best describes comparative advantage?

a. If a state can produce the highest volume of wool in the world, that state should produce wool regardless ofopportunity cost.
b. If a state can produce equal amounts of wine and wool, that state should produce whichever good is moreexpensive and desirable in the global economy.
c. If a state can produce wine at a lower opportunity cost than wool, that state should produce wine even if itcould produce more wool than any other state in the world.
d. States should avoid producing wine, as wool is a more valuable resource to the economy.