Answer the following questions true (T) or false (F)
1. In a two-good, two country world, if one country has a comparative advantage in the production of one good, it can benefit by trading with the other country.
2. For a person to have a comparative advantage in producing a product, he must be able to produce that product at a higher opportunity cost than his competitors.
3. It is not possible to have an absolute advantage in producing a good or service without having a comparative advantage.
1. TRUE
2. FALSE
3. FALSE
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The minimum percent of deposits that banks must hold and cannot loan is determined by the
A) interest rate. B) discount rate. C) required reserve ratio. D) federal funds rate. E) ratio of M2 to M1.
Refer to the data provided in Table 11.4 below to answer the following question(s).
Table 11.4 
Refer to Table 11.4. When the interest rate ________, the farmer will engage in no investment.
A. is less than 10% B. is greater than 10% C. is less than 30% D. is greater than 30%
Explain whether you agree with the following statement: Some economists claim that the recession of 2007 - 2009 was caused by a decline in spending on residential construction. This can't be true. If there had just been a decline in spending on residential construction, the only firms hurt would have been home builders and firms selling lumber and other goods used in building houses. In fact, many firms experienced falling sales during that recession, including automobile, appliance, and furniture firms.
A. I agree - the decline in spending on residential construction can't be the cause of the recession B. I disagree - the commentator assumes that the multiplier is greater than zero C. I disagree - the commentator ignores the additional rounds of spending that make up the multiplier process
A natural monopoly's output is less if it is regulated with
A) a marginal cost pricing rule than if it is unregulated. B) an average cost pricing rule than if it is unregulated. C) an average cost pricing rule than if it is regulated with a marginal cost pricing rule. D) a marginal cost pricing rule than if it is regulated with an average cost pricing rule. E) More information about the firm's demand is needed to determine how its output depends on what regulation it faces.