Is it possible for a firm to have a comparative advantage in producing something without having an absolute advantage? Why or why not?
What will be an ideal response?
Yes, a firm can have a comparative advantage without having an absolute advantage if it can produce a good or service at a lower opportunity cost than competitors, even if it is not able to produce more of the good or service than its competitors.
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Checking account deposits are counted in M1, but savings account deposits are not because
A) checking deposits can be used for payment; cash in savings cannot. B) checking deposits are a form of consumption; savings deposits are a form of investments. C) Trick question! Neither type is counted in M1. D) Trick question! Both deposit types are counted in M1.
The market structure called monopolistic competition is named using both monopoly and perfect competition. Why?
a. There are few firms in the market all producing identical products. b. There is just one firm whose product can be easily differentiated. c. There are a huge number of firms selling identical products at the same price. d. There are many firms with easy entry and exit but each firm sells a unique product. e. Firms spend very little on advertising and promotion and thus are price takers.
Which of the following is not included in GDP but occurs hand-in-hand with improvements in GDP?
a. production b. services c. investment d. environmental protection
Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers. Table 1.2Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)A20NA195 B35 180 C45 150 D50 100NAThe highest opportunity cost in Table 1.2 for B-1 bombers in terms of Stealth bombers is
A. 33 B-1 bombers B. 10 B-1 bombers C. 10 Stealth bomber per B-1 D. 10 Stealth bombers per B-1