Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Suppose that
trade is then initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Sylvania will now be able to consume a maximum of
a. 30 units of corn and 30 units of wheat.
b. 40 units of corn and 30 units of wheat.
c. 40 units of corn and 20 units of wheat.
d. 10 units of corn and 40 units of wheat.
a
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In answer to the question "How did Britain affect American economic growth?" Hughes and Cain (2011) reach what conclusion?
(a) The colonies were launched with English institutions, and they were allowed to modify them to meet local needs. In exchange for their investment in the colonies, the British expected the American colonies to produce and grow rapidly. (b) British policies were adverse to the colonies because they interfered with efforts to recruit a labor force and maintain employment at something close to full employment. (c) British policies prevented the colonies from going through an Industrial Revolution, as was occurring in England. (d) British policies significantly held down income growth in the colonies because they aimed at increasing the proportion of "primary" output at the expense of commercial and manufacturing output.
If policy makers believe that an inflationary boom is about to begin, the Keynesian view indicates that they should
a. increase the budget deficit. b. increase government spending and hold taxes constant. c. decrease government spending and/or raise taxes. d. hold government spending constant and decrease taxes.
Suppose the Fed forecasts a reduction in cash leakages. It might offset the effect of this on the money supply by
A) buying government securities. B) selling government securities. C) lowering the required reserve ratio. D) lowering the discount rate.
Which one of the following statements describes a disadvantage of operating a sole? proprietorship?
A. Sole proprietorships have fewer financial resources and fewer ways to get additional funds from lenders or investors. B. Sole proprietors are required to get approval from a business? partner, boss, or board of directors to change any aspect of their business strategy or tactics. C. Sole proprietors have less privacy and generally are required to report everything to others in the business. D. A sole proprietorship is difficult to establish and requires far more paperwork than do other structures. E. Income tax is a very complex matter for sole proprietorships compared with other forms.