The theory of comparative advantage suggests that a(n):
a. industrialized country should not import.
b. country that is not competitive should import everything.
c. country specialize in producing goods or services for which it has a lower opportunity cost.
d. none of these.
c
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Refer to Figure 5-13. The efficient equilibrium price of gasoline is ________ per gallon
A) $3.00 B) $3.75 C) $4.25 D) $5.00
Crowding out, following an increase in government spending, results from (the exchange rate is the foreign exchange price of the domestic currency)
A) higher interest rates and a lower exchange rate. B) lower interest rates and a lower exchange rate. C) lower interest rates and a higher exchange rate. D) higher interest rates and a higher exchange rate.
Suppose that, instead of taking this test, you could either have worked and earned income or partied and had a pleasurable time. Your opportunity cost of taking the test is the
A) forgone work. B) forgone party. C) forgone working and partying. D) forgone working or partying, depending on which was your next best choice. E) test because you are taking it.
Which of the following is NOT an example of the opportunity cost of investing in human capital?
A) lost wages while in school B) lost wages while in on-the-job training C) tuition payments D) apartment rent while working and going to school part-time