Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concept of absolute advantage, which of the following statements is true? The United States:
A. has the absolute advantage in the production of gloves, but not radishes.
B. does not have the absolute advantage in the production of either gloves or radishes.
C. has the absolute advantage in the production of radishes, but not gloves.
D. has the absolute advantage in the production of both gloves and radishes.
Answer: C
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What types of unemployment will still exist when the economy is at the natural rate of unemployment?
A) frictional, structural, and cyclical unemployment B) frictional and cyclical unemployment only C) frictional and structural unemployment only D) structural and cyclical unemployment only
National income is equal to gross domestic product minus:
a. indirect business taxes. b. depreciation. c. personal taxes. d. retained earnings. e. consumption spending.
Which statement is true?
A. Most of the United States' production is geared toward consumer goods. B. Nearly 25 percent of the United States' national output is devoted to armaments. C. Japan devotes a higher proportion of its national output to armaments than the United States does. D. What gets produced in the United States is decided by a central planning board consisting of top government, corporate, and union officials.
In Heckscher-Ohlin (H-O) theory, differences in ________ across countries are considered to be the basis for comparative advantage.
A. factor endowments B. production technologies C. economic freedom D. consumer tastes and preferences