Maximum Feasible Hourly Production Rates of EitherProduct A or Product B Using All Available ResourcesProductCountry XCountry YA48B44 Refer to the above table. Assuming constant opportunity costs
A. both countries will be willing to engage in trade at a rate of exchange of 3 units of product A for 1 unit of product B.
B. both countries will be willing to engage in trade at a rate of exchange of 1.5 unit of product A for 1 unit of product B.
C. both countries will be willing to engage in trade at a rate of exchange of 0.3 unit of product A for 1 unit of product B.
D. neither country will be willing to engage in trade at any rate of exchange of product A for product B.
Answer: B
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Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that the output per worker ratio (K/N) is
A) constant. B) growing at a rate of gA - gN. C) growing at a rate of gN. D) growing at a rate of gA. E) growing at a rate of ? + gA + gN.
The individual firm operating in a perfectly competitive labor market
A. can hire more labor only by offering a higher wage. B. can buy all the labor it wants at the going market wage rate. C. faces an inelastic demand for labor. D. will pay less to the additional labor employed.
With demand-pull inflation in the extended AD-AS model, there is:
A. A decrease in aggregate demand and a decrease in unemployment that eventually increases nominal wages B. An increase in aggregate demand and a decrease in unemployment that eventually decreases nominal wages C. An increase in aggregate demand and an increase in unemployment that eventually decreases nominal wages D. An increase in aggregate demand and a decrease in unemployment that eventually increases nominal wages
The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency. b. even if business firms fail to produce goods efficiently. c. even when market participants care only about their own self interests rather than about the overall efficiency of resource use. d. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.