"Everybody has a comparative advantage in something." Do you agree or disagree? Why?
What will be an ideal response?
Agree. Since comparative advantage is based on relative abilities, everyone has a comparative advantage in something. If A is better at B at everything, but A is 50 percent better than B in activity X while only 20 percent better than B in activity Y, B has a comparative advantage in Y because B must give up less X to produce another Y than A. The relativity of the concept implies that everyone has a comparative advantage in something.
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The main reason for the rising market value of corporate stock is
A) falling interest rates. B) changes in tax laws. C) increases in the prices of existing stock. D) the increased supply of new stock.
Which of the following is true about labor productivity?
A) it is the amount of total factor productivity (TFP) per unit of labor B) it is more difficult to measure than TFP C) it is a more general and better measure of productivity than TFP D) all of the above E) none of the above
Which of the following activities, if any, represents an external benefit? a. The benefit to a consumer from watching a film on DVD
b. The reduction in air quality resulting from industrial development in an urban area. c. The increase in the value of property belonging to your neighbors when you hire a landscaper to beautify your front yard. d. The reduction in property values when a new airport is built in a neighborhood.
From 1977 to 2015, what year had the largest budget deficit?
a. 1999 b. 2000 c. 2009 d. 2015