Production technology determines the relationship of total cost to outputs.
Answer the following statement true (T) or false (F)
True
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China has developed a comparative advantage in the production of clothing. The source of this comparative advantage is
A) investment in capital used to produce clothing. B) a large supply of natural resources. C) a large supply of unskilled workers and relatively little capital. D) superior process technology.
If Japan gives up ten bushels of rice to produce one bicycle, while the United States gives up five bushels of rice to produce one bicycle, then:
a. the opportunity cost of producing bicycles in the United States is higher than in Japan. b. Japan has a comparative advantage in the production of bicycles. c. the United States has an absolute advantage in the production of rice. d. total output will be highest if the United States specializes in rice and Japan specializes in bicycles. e. total output will be highest if Japan specializes in rice and the United States specializes in bicycles.
If the economy is near full employment and Congress cuts taxes, the proper monetary policy should be
a. expansionary to keep the economy fully employed. b. expansionary to counteract the increased deficit. c. contractionary to shift the aggregate demand curve outward. d. contractionary to counteract the effects of fiscal policy.
Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit. When the firm uses 6 units of labor, what is marginal cost?
A. $0.25 B. $7.06 C. $10.25 D. $5 E. $6.67