Japan can use all of its resources to produce 100 videos or 400 shoes. China can use all of its resources to produce 25 videos or 200 shoes
Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?
In Japan, the opportunity cost of producing a video is 4 shoes and in China it is 8 shoes. Therefore Japan has the comparative advantage in producing videos because its opportunity cost is lower. In Japan, the opportunity cost of producing a shoe is 1/4 of a video and in China the opportunity cost of producing a shoe is 1/8 of a video. China has the comparative advantage in producing shoes because its opportunity cost is lower.
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The above figure shows a perfectly competitive firm. If the market price is $5 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
Explain the reason why the debt-to-GDP ratio in the United States is expected to explode between now and the year 2042
What will be an ideal response?
Armpit Homunculus Prescott Pharmaceuticals is facing class action suit over side effects caused by its latest growth supplement. The lawyers representing the class are asking $200 million because they claim Prescott knew about and hid the fact that the
supplement caused Armpit Homunculus. Prescott claims it had no foreknowledge of this and can take their chance at trial where they expect a $50 million payment. Just before the trial date, an internal Prescott email is discovered in which Dr. Colbert, D.F.A. is joking about "how hideous the armpits will be on all these giants.". How does this affect the likely cost of settling the case?
A multinational corporation sells its goods in many countries but manufactures them in only one
Indicate whether the statement is true or false