Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The workers in Country A should specialize in __________________ because they possess the ___________________ in the production of that good.
A. bananas; comparative advantage
B. tomatoes; comparative advantage
C. bananas; absolute advantage
D. tomatoes; absolute advantage
A. bananas; comparative advantage
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The value of money varies inversely with the price level.
Answer the following statement true (T) or false (F)
(Last Word) Theft and burglary:
A. can be viewed as attempts to maximize utility, given certain marginal costs and marginal benefits. B. are examples of irrational behavior. C. are applications of the law of increasing opportunity cost. D. are less economically rational than crimes of passion and violence.
Figure 16.1A firm that generates pollution is illustrated in Figure 16.1. If the government imposes a pollution tax equal to P3, the firm's abatement choice will be:
A. A1. B. A2. C. A3. D. less than A1.
The following statements about the business cycle are correct except ______
A. it is a regular predictable cycle in real GDP around potential GDP B. from the peak to the trough, the economy is in a recession C. from the trough to the peak, the economy is in an expansion D. it is a periodic movement in economic activity including employment