Answer the following questions true (T) or false (F)
1. It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.
2. If Blake can pick more cherries in one hour than Cody, then Blake has a comparative advantage in cherry picking.
3. The basis for trade is absolute advantage, not comparative advantage.
1. TRUE
2. FALSE
3. FALSE
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When paper currency is decreed by governments as legal tender, legally it must be
A) paper currency backed by gold. B) a precious metal such as gold or silver. C) accepted as payment for debts. D) convertible into an electronic payment.
Suppose a profit-maximizing monopoly is able to employ group price discrimination. The marginal cost of providing the good is constant and the same in both markets
The marginal revenue the firm earns on the last unit sold in the market with the higher price will be A) greater than the marginal revenue the firm earns on the last unit sold in the market with the higher price. B) less than the marginal revenue the firm earns on the last unit sold in the market with the higher price. C) equal to the marginal revenue the firm earns on the last unit sold in the market with the higher price. D) greater than the marginal cost of the last unit.
Suppose the real gross domestic product (GDP) equals $200 billion this year and the nominal gross domestic product (GDP) equals $300 billion. This implies that the price level has increased by _____
a. $100 billion b. $200 billion c. 50 percent d. 100 percent e. 33 percent
Suppose Country A, a labor-abundant country, produces only wheat and cloth. The following equations illustrate the prices and costs of wheat and cloth in the country. The numbers indicate the amounts of labor and land needed to produce a unit of wheat and cloth. 'W' is the wage rate and 'r' is the rental rate of land.Price of wheat = 1w + 2rPrice of cloth = 2w + 1rIf the initial prices of wheat and cloth are $3 per unit, the labor cost per unit of cloth output is ________ and the rental cost per unit of cloth output is
A. $1; $2. B. $3; $1. C. $2; $1. D. $1; $3.