Suppose an American worker can make 100 chairs or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 chairs or catch 400 fish per day. The United States possesses a(n) ________ advantage in chair production, but not a(n) ________ advantage in fish production.
A. comparative; comparative
B. absolute; comparative
C. comparative; absolute
D. absolute; absolute
Answer: B
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If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy
Indicate whether the statement is true or false
The payroll tax represents
a. the largest source of revenue in the federal budget. b. the second largest source of revenue in the federal budget. c. the third largest source of revenue in the federal budget. d. the largest source of revenue in state government budgets.
Which famous economist developed the principle of comparative advantage as we know it today?
a. Adam Smith b. David Ricardo c. John Maynard Keynes d. Milton Friedman
Which of these is the basis of international trade?
A. Absolute advantage B. Comparative advantage C. Both comparative advantage and absolute advantage D. Neither comparative advantage nor absolute advantage