If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then ________ has a(n) ________ advantage in producing shoes.
A. Bob; absolute
B. Jane; absolute
C. Bob; comparative
D. Jane; comparative
Answer: B
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A voucher can eliminate the deadweight loss and lead to an efficient outcome if the value of the voucher equals the ________ of the good
A) marginal external benefit B) marginal social benefit C) marginal private benefit D) marginal social cost
If the Fed makes a discount loan of $2 million to a commercial bank, the Fed's balance sheet will show
A) an increase in discount loans of $2 million and an increase in bank reserves of $2 million. B) an increase in discount loans of $2 million and a decrease in bank reserves of $2 million. C) a decrease in discount loans of $2 million and an increase in bank reserves of $2 million. D) a decrease in discount loans of $2 million and a decrease in bank reserves of $2 million.
In economics, the term "marginal" usually refers to
a. a small change in an economic variable b. a low-quality product or resource c. an unimportant and irrelevant economic variable d. an all-or-nothing economic decision e. a footnote or minor point
The empirical evidence on purchasing power parity over the long run seems to point out that:
A. the theory of purchasing power parity cannot explain long-run changes in exchange rates. B. the higher a country's inflation rate the greater is the depreciation in the country's currency. C. the higher a country's inflation rate, the greater is the appreciation in the country's currency. D. there isn't any clear link between inflation rates and exchange rates.