Question 1. (a) What does it mean to buy low and sell high, globally?
(b) Provide an example of a business efficiently using this economic principle.
Question 2. (a) What does it mean to specialize according to one's comparative advantage and trade internationally? (b) Provide an example of a business efficiently using this economic principle.
Question 3. (a) Define opportunity cost. (b) Does every business choice have an opportunity cost? Explain. (c) Provide an example of a business practice with an economic cost that is different than its accounting cost. (d) Provide an example of a business practice with an opportunity cost that is different than its monetary cost. (e) Could the opportunity cost of a given resource use be different for different companies and/or be different for the same company at different times.
Question 4. (a) Is the economic cost of most international trade less than the economic benefit of that trade for the companies involved? Explain. (b) Is the economic cost of most international trade less than the economic benefit of that trade for the countries involved? Explain.
Question 5. (a) Which is usually better for most countries, protectionist trade policies or free trade? Explain. (b) For most countries would a fair trade policy usually be the same as a free trade policy? Explain