Refer to Figure 3. Ben has a comparative advantage in
a. cones and Jerry has a comparative advantage in ice cream.
b. ice cream and Jerry has a comparative advantage in cones.
c. neither good and Jerry has a comparative advantage in both goods.
d. both goods and Jerry has a comparative advantage in neither good.
Ans: a. cones and Jerry has a comparative advantage in ice cream.
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Suppose that the interest rate available to you on a long-term bond is 4 percent. If you hold $1,000 of your wealth in currency instead of in the form of a bond, the annual opportunity cost is
A) $0.04. B) $4. C) $40. D) $400.
In the loanable funds market, if the real interest rate is higher than the equilibrium real interest rate,
A) the demand for loanable funds curve shifts rightward to restore the equilibrium. B) there is a surplus of investment. C) there is a shortage of loanable funds. D) the demand for loanable funds curve shifts leftward to restore the equilibrium. E) there is a surplus of loanable funds.
A central bank can reduce inflation by reducing money supply growth, but it necessarily does so at the cost of permanently raising the unemployment rate
a. True b. False Indicate whether the statement is true or false
The payoff matrix shows all of the following EXCEPT
A. if one chooses a low price and the other doesn't, the low priced firm will make $8 million. B. if one oligopolist chooses a high price and the other doesn't, the high-priced firm makes $8 million. C. if they both choose a low price, each makes $4 million. D. if both oligopolists choose a high price, each makes $6 million.