Which of the following is TRUE regarding international trade?

Trade benefits everyone compared to autarky

A country will prefer autarky if it has absolute advantage in producing every good

Trade benefits occur through a rise in real wages

None of the above

6.Sunshine Smoothies imports $5,000 of mangoes and buys $5,000 of strawberries from local farmers. It pays $1,000 in wages and $1,000 in rent. It sells $8,000 worth of smoothies to local consumers and ships $5,000 of frozen smoothies abroad. Which of the following statements regarding the firm's impact on the national income accounts is TRUE?

It contributes $13,000 to consumption and investment

It contributes $3,000 to value added

It contributes $2,000 to income

It contributes (-$5000) to net exports

7Which of the following could be consistent with a rise in the unemployment rate?

Employment grew faster than the labor force

Unemployment increased at a slower pace than the labor force

The participation rate shrank as the labor force grew

The gap between the participation rate and the employment-population ratio narrowed

8The exponent (a) in the production function reflects all of the following, EXCEPT:

Diminishing returns to capital

The share of income paid to capital

A parameter limiting the impact of TFP on growth

An input into the gross return on capital