Which of the following statements is true?
A) The principle of comparative advantage provides a basis for trade when two nations have the same opportunity cost of producing a good.
B) The principle of absolute advantage provides a basis for the determination of the terms of trade between two trading nations.
C) The principle of absolute advantage forms the basis of trade when a nation can produce more of all the goods and services compared to the other nations.
D) The principle of comparative advantage provides a range of prices within which trade will occur.
D
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John fishes for a living. Last year, he sold $100,000 of fish. Bait, nets and other fishing supplies cost John $10,000 and he paid $40,000 in salaries to his helpers
Depreciation on his boat and other equipment, as calculated using IRS rules, was $15,000. What was John's profit as would be calculated by an accountant? A) $165,000 B) $100,000 C) $65,000 D) $35,000 E) None of the above answers is correct.
In Exhibit 5-9, the price elasticity of supply for good X between points E and C is:
a. 7/5 = 1.40. b. 1/5 =0.20. c. 5/7 = 0.71. d. 1.
Carla had received very low annual return from her investment portfolio comprising of stocks of five companies for two years. Her decision to continue holding the same portfolio of assets will be an example of:
a. bounded rationality. b. selfishness. c. altruism. d. systematically missed opportunities.
Refer to the given data. With a $1-per-unit tariff, price and total quantity sold will be:
Answer the question on the basis of the following domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.
A. $3 and 7 units.
B. $5 and 2 units.
C. $1 and 16 units.
D. $2 and 11 units.