If France is capable of producing either cheese or wine or some combination of those two products, then France should:
A. produce the one it is more efficient at producing.
B. produce the one for which it has a comparative advantage.
C. produce the one for which it has a higher opportunity cost.
D. remain self-sufficient if it has the absolute advantage in the production of both.
B. produce the one for which it has a comparative advantage.
You might also like to view...
If you overhear a group of people talking about their plans to save for their retirement and one of them says that it causes them to save less and the other says they will save more, you would conclude
A. that both are rational, they just have different perspectives. B. the person decreasing saving is rational and the other is irrational. C. the person increasing saving is rational and the other is irrational. D. neither are rational, Social Security affects no one's saving.
The negative relationship between unemployment and inflation is known as the
A) aggregate supply curve. B) aggregate demand curve. C) Phillips curve. D) efficiency wage line.
Which of the following will increase interest rates in the short run?
a. an decrease in reserve requirements b. the sale of bonds by the Federal Reserve in the open market c. a decrease in real GDP d. an decrease in the price level
If a monopolistically competitive firm is producing an output level where its marginal cost is equal to its marginal revenue but it still earns a loss, then it should always shut down in the short run.
Answer the following statement true (T) or false (F)