If a country has a comparative advantage in the production of all goods, it should:
a. specialize in the production of goods with the lowest opportunity cost.
b. specialize in the production of goods with the highest opportunity cost.
c. specialize in the production of goods with the absolute advantage.
d. specialize in the production of goods without the absolute advantage.
e. not specialize at all and produce all the goods itself.
a
You might also like to view...
To pay for WW I, the national debt was expanded from ___ percent of GDP at the beginning of the war to ___ percent of GDP by the end of the war
a. 1; 5 b. 2; 13 c. 3; 32 d. The national debt did not expand due to reparations payments.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B would be using resources efficiently if they were producing:
A. (200 iPods, 1,750 tablets). B. (200 iPods, 1,500 tablets). C. (200 iPods, 1,000 tablets). D. (200 iPods, 750 tablets).
During a war, governments will sometimes draft people, most of whom are presently employed, into the army. An economist, computing the real cost of the war, would be sure to include which of the following items?
a. the value of the civilian goods no longer produced by the new soldiers b. the cost of feeding and clothing the new soldiers c. the dollar cost of the payroll d. the higher prices of civilian goods due to wartime shortages e. the cost of transporting the soldiers to combat
An apple farmer must decide how many apples to harvest for the world apple market. He knows that there is a one-third probability that the world price will be $1, a one-third probability that it will be $1.50, and a one-third probability that it will be $2. His cost function is C(Q) = 0.01Q2. The expected profit-maximizing quantity is:
A. 150. B. 0. C. 90. D. 75.