If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
A) the average cost of production for sugar cane is lower in Brazil than in Cuba.
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.
Answer: C
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Macland is running a budget deficit and has issued new treasury bonds. Foreign investors are eager to buy the newly issued bonds but to do so must have Macland currency. What effect does this budget deficit have on the value of Macland’s currency?
a. The exchange rate will not change. b. The exchange rate will depreciate. c. The exchange rate will appreciate. d. The exchange rate will decrease.
Deflation is bad because:
A. wages decline. B. prices decline. C. monetary policy becomes impotent. D. fiscal policy becomes impotent. E. deflation is not bad.
Total consumer surplus is measured as the area:
A. beneath the market price and above the supply curve. B. above the demand curve. C. between the demand curve and the supply curve. D. beneath the demand curve and above the market price.
Maximum Feasible Hourly Production Rates (in Tons) of EitherWine or Beef Using All Available ResourcesProductArgentinaFranceWine (gallons)3060Beef (pounds)1030Use the above table. Assuming constant opportunity costs, the opportunity cost of producing a gallon of wine in Argentina is
A. 0.33 pound of beef. B. 0.5 pound of beef. C. 2 pounds of beef. D. 3 pounds of beef.