What is the difference between comparative advantage and absolute advantage?
What will be an ideal response?
Absolute advantage refers to the ability to produce a good with fewer total resources. Comparative advantage is the ability to produce at the lower opportunity cost. A comparative advantage exists when one has to give up fewer units of the other good than another person or country.
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The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price
A) is less than $6. B) is $6. C) is more than $6. D) could be less than, equal to, or more than $6.
During a recession, which of the following will be true?
a. The actual rate of unemployment will be lower than the natural rate. b. Actual GDP will be lower than potential GDP. c. The employment/population ratio will increase substantially. d. Actual inflation will be higher than was anticipated.
The recession that began in the United States in 2007
What will be an ideal response?
If the price of Diet Pepsi rises, what happens to the price of Diet Coke?
A. It will rise. B. It will fall. C. It will remain the same. D. There is no way of telling what will happen to the price of Diet Coke.