Refer to Table 2-4. Which of the following statements is true?
A) George has an absolute advantage in both tasks.
B) Jack has an absolute advantage in both tasks.
C) Jack has an absolute advantage in lawn mowing and George in garden cultivating.
D) Jack has an absolute advantage in garden cultivating and George in lawn mowing.
A
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Compensation of employees is the largest component of GDP using the income approach
a. True b. False Indicate whether the statement is true or false
When there is a positive externality associated with the watering of one's lawn, the free market results in
a. not enough lawn watering b. too much lawn watering c. the socially optimal level of lawn watering d. people watering each other's lawns e. government taxes on lawn watering
Which of the following provides the clearest statement of the Ricardian equivalence theorem?
a. Both an increase in government expenditures and a reduction in taxes will provide a substantial stimulus for aggregate demand. b. When additional debt is used to finance a tax cut, the lower taxes and higher interest rates will exert an equivalent impact on aggregate demand. c. The finance of government spending with additional debt is essentially the same thing as finance with higher taxes because the larger debt implies higher taxes in the future. d. A 10 percent reduction in tax rates will reduce tax revenues by 10 percent.
A drought in the Midwest will raise the price of wheat because of a
A) leftward shift in the supply curve. B) rightward shift in the supply curve. C) leftward shift in the demand curve. D) rightward shift in the demand curve.