If it takes one country three units of labor to produce a computer and two units of labor to produce a TV, but it takes the other country four units of labor to produce a computer and five to produce a TV, then the first country has
A. an absolute advantage in TVs but a comparative advantage in computers.
B. an absolute advantage in TVs and computers but a comparative advantage in TVs only.
C. an absolute advantage in TVs and computers but a comparative advantage in computers only.
D. a comparative advantage in both goods.
Answer: B
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Refer to Table 9-12. All of the following are terms of trade that could possibly benefit both countries except
A) 1 belt : 1.75 swords. B) 1 belt : 1.25 swords. C) 1 belt : 1.33 swords. D) 1 belt : 2.25 swords.
If Carol's Crayon Factory's price exceeds its average total cost in the short run, then
a. it should shut down b. it is earning a profit c. profits are being maximized d. it should increase output e. it should decrease output
Which of the following is an example of a nonmarket transaction?
a. a vacation in Hawaii b. a bribe paid to a politician c. income from illegal gambling d. swapping one good for another good
The Taft-Hartley Act outlawed all of the following practices EXCEPT
A) secondary boycotts. B) union shops. C) closed shops. D) sympathy strikes.