If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. Which of the following statements is correct?
A. Leo has both the absolute advantage and the comparative advantage in fudge.
B. Ana has the comparative advantage in toffee, but Leo has the absolute advantage in toffee.
C. Ana has the comparative advantage in fudge, but Leo has the absolute advantage in fudge.
D. Ana has both an absolute advantage and the comparative advantage in fudge.
Answer: C
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A) not change autonomous consumption and rotate the consumption function upward. B) decrease autonomous consumption and shift the consumption function downward. C) not change autonomous consumption and rotate the consumption function downward. D) increase autonomous consumption and shift the consumption function upward.
Rising unemployment and decreased business confidence could be signs that the economy is at the start of a(n):
A. recession. B. boom. C. recovery. D. expansion.
The traditional view of the production process is that capital is subject to
a. diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries. b. diminishing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries. c. increasing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries. d. increasing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.
A change in the quantity demanded of a product is the result of a change in
A) consumer income. B) the price of the product. C) the cost of producing the product. D) the price of related goods.