When one country can produce a product at a lower cost in terms of other goods, that country is said to have
A. a productive advantage.
B. an absolute advantage.
C. a comparative advantage.
D. an unfair advantage.
Answer: C
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The elasticity of demand for gasoline is likely to be relatively low in the short term and higher as the period of time gets longer.
Answer the following statement true (T) or false (F)
Banks' asset portfolios include state and local government securities because
A) they help to attract business from these government entities. B) banks consider them helpful in attracting accounts of Federal employees. C) the Federal Reserve requires member banks to buy securities from state and local governments located within their respective Federal Reserve districts. D) there is no default-risk with state and local government securities.
Of the following methods that banks might use to reduce moral hazard problems, the one not legally permitted in the United States is the
A) requirement that firms keep compensating balances at the banks from which they obtain their loans. B) requirement that firms place on their board of directors an officer from the bank. C) inclusion of restrictive covenants in loan contracts. D) requirement that individuals provide detailed credit histories to bank loan officers.
The total fixed cost of operating a lumberyard equals $12,000 this year. The average fixed cost of the lumberyard will not be affected by the quantity of lumber that is sold
a. True b. False Indicate whether the statement is true or false