6. The interaction of individual choices Consider the following scenario: People in Iowa eat both corn and potatoes. It is technically possible for farmers to grow both corn and potatoes in Iowa, yet almost no farmers grow potatoes. Instead, every year, Iowa exports corn and imports potatoes from Idaho, where farmers specialize in potatoes. Which of the following principles of economic interaction best describes this scenario? All costs are opportunity costs. There is a tradeoff between equity and efficiency. There are gains from trade. When markets do not achieve efficiency, government intervention can improve overall welfare. True/False: Evaluate the following statement: Aa Aa "People tend to exploit gains from trade, which usually lead to efficient market outcomes." False True JE
6. The interaction of individual choices Consider the following scenario: People in Iowa eat both corn and potatoes. It is technically possible for farmers to grow both corn and potatoes in Iowa, yet almost no farmers grow potatoes. Instead, every year, Iowa exports corn and imports potatoes from Idaho, where farmers specialize in potatoes. Which of the following principles of economic interaction best describes this scenario? All costs are opportunity costs. There is a tradeoff between equity and efficiency. There are gains from trade. When markets do not achieve efficiency, government intervention can improve overall welfare. True/False: Evaluate the following statement: Aa Aa "People tend to exploit gains from trade, which usually lead to efficient market outcomes." False True JE
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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