Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. What is the opportunity cost of producing coffee in Chile?
a. Half a pound of sugar
b. Two-fifth of a pound of sugar
c. 2 pounds of sugar
d. One-third of a pound of sugar
e. 4 pounds of sugar
b
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One major problem with concentration ratios is that they fail to take into account:
A. The localized market for products B. Excess capacity in production C. Price leadership D. Mutual interdependence
Why were Thomas Malthus' fears of increasing impoverishment for Europe and America unfounded?
What will be an ideal response?
What is the interest rate on a 12-month U.K. certificate of deposit if the dollar return on the certificate is 4 percent and the dollar has appreciated 9 percent against the British pound?
a. 15 percent b. 13 percent c. 9 percent d. 5 percent e. 4 percent
If nominal wealth increases faster than real wealth:
A. real wealth must eventually decline. B. society is better off than if nominal wealth growth had matched real wealth growth. C. real wealth will eventually rise faster in order to catch up. D. asset inflation has occurred.