Suppose a worker in Argentina can produce either 20 units of cloth or 2 bottles of wine per day, while a worker in Chile can produce either 24 units of cloth or 12 bottles of wine per day. If Argentina transfers 2 units of labor from wine to cloth and Chile transfers 1 unit of labor from cloth to wine, the combined output will be:
a. 16 bottles of wine and 8 units of cloth.
b. 16 bottles of wine and 16 units of cloth.
c. 12 bottles of wine and 12 units of cloth.
d. 8 bottles of wine and 16 units of cloth.
d
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Which one of the following describes the current state of economic development in the United States?
A) The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. B) Employment is declining in the manufacturing sector and growing in the service sector. C) Employment is declining in the manufacturing sector and growing in the agricultural sector. D) The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace.
Fiscal policy under the Reagan administration was intended to: a. stimulate the economy by decreasing taxes in order to increase consumption
b. increase tax revenues by increasing the tax rate. c. balance the budget by increasing defense spending and increasing taxes. d. stimulate the economy by decreasing taxes in order to increase aggregate supply. e. stimulate the economy by increasing government spending in order to increase aggregate supply.
In the short run, a monopolist: a. always suffers an economic loss
b. always earns an economic profit. c. always earns a normal rate of return. d. may make an economic loss, an economic profit, or zero economic profits.
Although checking deposits are considered money, they are actually
a. fictitious numbers in persons' checkbooks. b. backed by commodities like gold. c. not very useful for making payments. d. bookkeeping entries in bank balance sheets.