Making a pound of wool takes 5 hours in Scotland and 2 hours in Iceland. Making a cord of firewood takes 5 hours in Scotland and 8 hours in Iceland. Suppose that labor is only productive resource needed in these industries, and is fully employed in both nations. Under these conditions, if Iceland produces 4 extra pounds of wool, but Scotland produces 2 fewer pounds of wool, there is a net
A. gain of 2 cords of firewood in the world.
B. gain of 1 cord of firewood in the world.
C. loss of 2 cords of firewood in the world.
D. loss of 1 cord of firewood in the world.
B. gain of 1 cord of firewood in the world.
You might also like to view...
One of the risks of maturity transformation is that:
A) it can increase the rate of inflation. B) it reduces the profitability of banks. C) it can lead to bank runs. D) it discourages savings.
According to supply-side economics, a cut in taxes will affect total tax revenue, because ________
A) the level of productivity should fall precipitously with a tax cut B) a tax cut will be followed by an even larger decrease in government spending C) of the resulting increase in saving D) of the positive impact on the level of income
In oligopoly, any action by one firm to change price, output, or quality causes
A) a reaction by other firms. B) no reaction from the other firms. C) a profit gain for the other firms. D) loss of market share by the acting firm.
Explain the importance of the shape of supply curve for undertaking stabilization policies.
What will be an ideal response?