What is comparative advantage? Give an example
What will be an ideal response?
Comparative advantage is the ability of a person to produce a good at a lower opportunity cost compared to another person. A lower opportunity cost means that the person gives up less to produce the good compared to another person. For example, one person may need to give up one hour of typing to get dinner made while another person must give up two hours of typing to produce the same dinner.
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When a firm builds a new factory, this is an example of an investment in:
A. human capital. B. physical capital. C. research and development. D. the market.
In comparing one market basket, A, to others to the northwest or southeast, we can say that a typical consumer will
a. prefer A to any other market basket. b. prefer any other market basket to A. c. be indifferent between A and any other market basket. d. find any of the above are possible.
Explain the infant industry argument case against free trade
What will be an ideal response?
A legal claim against a firm that usually entitles the owner of the claim to receive a fixed annual coupon payment, plus a lump-sum payment at some future date, is known as
A) a bond. B) a share of common stock. C) a share of preferred stock. D) a reinvestment coupon.