Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concepts of advantage and trade, we can say that the opportunity cost of one pair of gloves is:
A. lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production.
B. higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.
C. the same for both the United States and Bangladesh, therefore no comparative advantage exists.
D. the same for both the United States and Bangladesh, therefore they both have the comparative advantage in glove production.
B. higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.
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If the marginal cost curve is below the average variable cost curve
A. both average total cost and average variable cost are decreasing. B. average variable cost is less than average fixed cost. C. both average total cost and average variable cost are increasing. D. average total cost is increasing but average variable cost is decreasing.
Country A has a lower stock of capital than Country B, but the supply of labor in both the countries is equal
A) An additional unit of capital will increase output in Country A only if there is an increase in the total efficiency units of labor. B) The increase in output due an additional unit of capital will be larger in Country A than in Country B. C) The increase in output due an additional unit of capital will be smaller in Country A than in Country B. D) An additional unit of capital will increase output in Country B only if there is an increase in the total efficiency units of labor.
An example of how economic growth might not lead to economic development is:
A. the rate of literacy increased among all groups when a nation’s economy grew. B. people had greater social mobility due to the growth experienced in the nation. C. the average income in a nation increased with greater GDP growth. D. when a nation’s economy grew, the rate of malnutrition among children was relatively constant.
National saving is saving by:
A. the entire economy. B. the government. C. households and firms D. households for retirement.