When Brazil can generate a product using fewer labor hours and resources than the United States, an economist would say that Brazil had:
A. a comparative advantage in production of the product.
B. an absolute advantage in production of the product.
C. a higher opportunity cost of producing the product.
D. no incentive to import the product, regardless of the cost-price conditions for other products.
Answer: B
You might also like to view...
Something that changes incentives so as to make otherwise empty threats or promises credible is called a:
A. dominant strategy. B. commitment device. C. strategic device. D. Nash equilibrium.
Which of the following would count as an investment expenditure in national income accounting?
a. General Motors hires 10 electrical engineers. b. Boeing purchases a new metal stretching machine used to produce airplane wings. c. Ms. Quantum buys 100 shares of Microsoft stock. d. A large corporation spends $10,000 per month on long-distance phone charges.
What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?
a. At that point, interest rate policy cannot be used. b. Monetary easing can still occur whenever interest rates are greater than zero at the retail level. c. The central bank can increase the money supply, and interest rates can be less than zero. d. Borrowing can be stimulated in ways other than lower rates of interest.
In an economy where firms in most industries are purely competitive firms, individual firms in each industry would produce ________ products and have a ________ share of industry output.
A. differentiated; large B. differentiated; small C. standardized; small D. standardized; large