Comparative advantage is the ability, compared with another producer
A. to produce an additional unit of a product at lower opportunity cost.
B. to produce a higher-quality product with fewer resources.
C. to use fewer inputs to produce the same amount of a product.
D. to produce more of a product with the same resources.
Answer: A
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A main reason why the U.S. trade deficit grew so large from 1997 to 2000 was that
A. Congress removed all tariffs and trade restrictions on imports. B. NAFTA was introduced and Mexican exports flooded the United States. C. the international value of the dollar fell during the 1990s, which encouraged U.S. exports. D. the international value of the dollar rose in the last half of the 1990s, which encouraged U.S. imports and damaged U.S. exports.
In 2008 the money wage rate in Ireland increased by 4 percent while the price level increased by 8 percent. As a result, Ireland's
A) short-run aggregate supply curve shifted leftward. B) short-run aggregate supply curve shifted rightward. C) long-run aggregate supply curve shifted rightward. D) short-run and long-run aggregate supply curves shifted rightward.
In using the budget as an economic stabilizer, the United States has had the least success in
a. incurring deficits. b. finding spending projects. c. generating surpluses. d. borrowing money.
Refer to the data below. Which of the following statements about the two nations is correct based on the principle of comparative advantage?
Answer the following question on the basis of the data given for two regions, East and West, of a hypothetical world. The nations have the production possibilities for units of food and clothing given below.
A. East should specialize in the production of food
B. West has a comparative advantage in the production of clothing
C. West has a comparative advantage in the production of food
D. West should specialize in the production of clothing