Should countries specialize in producing goods and services based on having a comparative advantage or an absolute advantage? Why?
What will be an ideal response?
Countries should specialize in producing products based on comparative advantage because this allows countries to produce those products and services at a lower opportunity cost than competitors.
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Suppose the CPI for this year is 133.7. This number means that
A) on average, goods cost $133.70 each this year. B) prices rose 33.7 percent over the last year. C) prices rose 133.7 percent over the base year. D) prices rose 33.7 percent over the base year. E) prices rose 133.7 percent over the last year.
Table 7-4 ? 6 346 490 600 692 775 846 ? 5 316 448 548 632 705 775 ? 4 282 400 490 564 632 692 CAPITAL 3 245 346 423 490 548 600 ? 2 200 282 346 400 448 490 ? 1 141 200 245 282 316 346 ? 0 1 2 3 4 5 6 ? LABOR ? ? ? ? ? The production relationship in Table 7-4 indicates a process characterized by
A. decreasing returns to scale. B. constant returns to scale. C. increasing returns to scale. D. increasing then decreasing returns to scale.
Which of the following is an example of a normative statement?
A. Tom is a college student. B. Immigration should be allowed in the United States. C. The cost of basic health insurance rose from the previous year. D. The federal minimum wage is $7.25.
In the foreign exchange market where French francs are traded for Japanese yen, a decrease in the interest rate in France is most likely to cause:
a. a decrease in the yen price of the French franc. b. an increase in the interest rate in Japan. c. an increase in the yen price of the French franc. d. an increase in the demand for French francs. e. an increase in the supply of yen.