Answer the following questions true (T) or false (F)
1. If a country produces only two goods, then it is not possible to have a comparative advantage in the production of both those goods.
2. In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it can still benefit by trading with the other country.
3. If the opportunity cost of producing more of one good increases as more of that good is produced, then the production method is inefficient.
1. TRUE
2. TRUE
3. FALSE
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High economic growth of a country refers to
The largest source of income for most people is:
A. income from interest in savings accounts. B. wages earned at work. C. rental income from properties that they own. D. investment income.
For all goods other than those that are addictive, and assuming that the quantity consumed is not so large that the last units consumed generate negative marginal utilities, we can say that, for the consumer, as more of the good is consumed, its marginal utility _____ while its total utility _____
a. increases; decreases b. decreases; increases c. increases; increases d. decreases; decreases e. no general rule can be made here
The multiplier effect
a. and the crowding-out effect both amplify the effects of an increase in government expenditures. b. and the crowding-out effect both diminish the effects of an increase in government expenditures. c. diminishes the effects of an increase in government expenditures, while the crowding-out effect amplifies the effects. d. amplifies the effects of an increase in government expenditures, while the crowding-out effect diminishes the effects.