Assume the United States and Australia have the same amount of resources. In a given time period, the United States can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that
A. Australia has an absolute advantage in both beef and cars.
B. Australia has a comparative advantage in cars.
C. The United States has an absolute advantage in both beef and cars.
D. The United States has a comparative advantage in beef.
Answer: C
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If the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, then the unemployment rate would be
A. 8%. B. 6%. C. 4%. D. 10%.
Aggregate income equals: a. the sum of income earned by all laborers in the world economy
b. the sum of income earned by all workers in the private sector. c. the sum of the income earned by all the resource suppliers in an economy. d. the total income of all employees after payment of income tax. e. the total income of all employees after purchases of necessities.
The social security tax, like any other tax, is shared by employers and employees based on the elasticities of demand and supply. If the wage elasticity of demand for labor is zero and the wage elasticity of supply for labor is positive:
a. most of the tax will be paid by the employer. b. most of the tax will be paid by the employee. c. all of the tax will be paid by the employer. d. all of the tax will be paid by the employee. e. the tax is split evenly between the employer and employee.
The growth rate of potential GDP depends, among other factors, on the
a. rate of technological progress. b. unemployment rate. c. size of the labor force. d. rate of capital stock depreciation.