Explain whether it is possible for a country to have a comparative advantage in the production of a product without having an absolute advantage in the production of that product
What will be an ideal response?
A country can have a comparative advantage without having an absolute advantage in the production of a product because having a comparative advantage means that the country can produce the product at a lower opportunity cost than another country, and having an absolute advantage means a country can produce more of the product than another country while using the same amount of resources. Having an absolute advantage is not required to have a comparative advantage.
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Exhibit 6-5 Workers and output data Laborers TotalProduct 0 0 1 8 2 20 3 25 4 28 5 29 In Exhibit 6-5, the marginal product of the second worker is:
A. 8. B. 10. C. 12. D. 20.
If there are significant excess reserves, a liquidity trap:
A. is inevitable. B. Excess reserves and the liquidity trap are unrelated. C. is possible. D. cannot exist.
Eight years ago you purchased an asset for $100,000 that has yielded a nominal capital gain of $30,000. If you sold the asset today, your inflation-adjusted capital gains would be zero due to inflation over the last eight years. The capital gains tax is 28 percent. If you sold the asset today your tax liability would be
A. zero. B. $28,000. C. $8,400. D. cannot be determined without more information.
The real purpose of the Webb-Pomerene Act of 1918 was to alter the terms of trade in favor of the United States
Indicate whether the statement is true or false