Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities curve, it is clear that:
A. Country A should specialize in cars and Country B should specialize in trucks, and both could benefit from trade.
B. Country A should specialize in trucks and Country B should specialize in cars, and both will benefit from trade.
C. Country A will not benefit from trade.
D. Country B will lose by trading with Country A.
A. Country A should specialize in cars and Country B should specialize in trucks, and both could benefit from trade.
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Since the Internet became a common tool for business, employees at Plain Truth Advertising have maintained a semi-secret website where wages of employees are published and comparative salaries of friends at other advertising agencies are also published. Employees at Plain Truth have noticed that wage dispersion of similarly ranked employees has shrunk dramatically in the past five years. What happened?
What will be an ideal response?
Higher interest rates can cause the ________ curve for new cars to ________.
A. demand; shift to the right. B. supply; shift to the right. C. demand; shift to the left. D. supply; shift to the left.
What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?
What will be an ideal response?
Refer to Table 2-6. Which of the following statements is true?
A) Lucy has a comparative advantage in making both products. B) Lucy has a comparative advantage in making tricycles and James in making wagons. C) James has a comparative advantage in making both products. D) Lucy has a comparative advantage in making wagons and James in making tricycles.