Assume that Country A produces 60 tons of sugar using 6 productive units and that Country B produces 40 tons of sugar using 6 productive units. Assume further that Country A produces 120 tons of coffee using 4 units of production and that Country B produces 90 tons of coffee using 4 units of production. It follows that
a. Country A has a comparative advantage over Country B in the production of coffee.
b. Country A has a comparative advantage over Country B in the production of coffee and sugar.
c. Country A has a comparative advantage over Country B in the production of sugar.
d. Country B has a comparative advantage over Country A in the production of sugar.
c. Country A has a comparative advantage over Country B in the production of sugar.
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The term “satisficing” indicates an optimal choice.
Answer the following statement true (T) or false (F)
As the nominal interest rate increases, the opportunity cost of holding money ________ and the quantity of money demanded ________
A) decreases; decreases B) increases; increases C) decreases; increases D) increases; decreases E) increases; does not change because people need money
The real interest rate is equal to the
A) nominal interest rate plus the inflation rate. B) nominal interest rate minus the inflation rate. C) nominal interest rate times the inflation rate. D) nominal interest rate divided by the inflation rate. E) inflation rate minus the nominal interest rate.
In the economic way of thinking, countries are poor because they lack
A) money. B) access to the New York Stock Exchange. C) foreign aid. D) productive knowledge and ideas. E) effective minimum wage legislation.