Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Assuming both countries have the same amount of resources available to them, which of the following statements is true? Country A has:
A. an absolute advantage in the production of cars, and Country B has the absolute advantage in the production of trucks.
B. an absolute advantage in the production of trucks, and Country B has the absolute advantage in the production of cars.
C. the absolute advantage in the production of both cars and trucks.
D. the absolute advantage in neither the production of cars nor trucks.
C. the absolute advantage in the production of both cars and trucks.
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The formula for the slope across an arc is used to approximate the slope for
A) linear relationships only. B) a curved line. C) a positive relationship only. D) a negative relationship only.
At the international level, the division of labor increases output through
a. tariffs. b. economies of scale. c. standardization. d. exchange rates.
When the inflation rate ends up being lower than expected,
a. everyone benefits because money is cheaper b. everyone benefits because prices do not increase c. lenders of fixed-rate mortgages generally benefit because they will make higher profits than they had calculated d. borrowers with fixed-rate loans will benefit because their purchasing power will not decline as much e. no one benefits because everyone made financial calculations based on the projected interest rate
Because the prices of final goods and services tend to increase more quickly than the prices of inputs, the short run aggregate supply curve is:
A. perfectly elastic. B. upward sloping. C. downward sloping. D. perfectly inelastic.