Figure 34-7
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In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. The graph indicates Pestoland has an absolute
A. advantage in both pesto and pasta.
B. and comparative advantage in both pesto and pasta.
C. advantage in both goods, but a comparative advantage only in pesto.
D. advantage in pesto only and a comparative advantage only in pasta.
Answer: A
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The interest rate is the opportunity cost of transferring spending power between time periods. However, the market mechanism may fail to provide adequately for future economic growth. List the reasons why a market might fail.
What will be an ideal response?
Total output includes all of the following except:
A. Household consumption. B. Business investment. C. Imports. D. Government services.
Jake can wash 6 cars or mow 3 lawns during the same time. His marginal cost of washing a car is:
a. mowing one-third lawn. b. mowing half a lawn. c. mowing one lawn. d. mowing 2 lawns.