Consider the following information, and assume that opportunity costs are constant: On one hand, residents of Country A can produce more corn in a year than residents of Country B, but they can produce computers at a lower opportunity cost than residents of country B. On the other hand, residents of country B can produce more computers in a year than residents of Country A, but they can produce corn at a lower opportunity cost than residents of country A. It can be concluded that residents of
A) Country A should produce corn and trade it for computers produced in Country B.
B) Country B should produce computers and trade them for corn produced in Country B.
C) Country A should produce computers and trade them for corn produced in Country B.
D) both countries should choose not to trade.
C
You might also like to view...
The positive slope of the per-worker production function illustrates the relationship between per-worker output and ________
A) diminishing marginal returns B) the capital-labor ratio C) the rate of inflation D) the rate of unemployment
Assume baseball player salaries are fully determined before the season starts. From the point of view of the baseball team owner, player salaries during the course of the season are then
A) variable costs. B) marginal costs. C) fixed costs. D) average costs.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
A person 16 years or older who does not work, but is actively looking for work, is officially classified as:
A. employed. B. out of the labor force. C. unemployed. D. chronically unemployed.