Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s). According to this Application, in the 1990s EU countries had ________ in the production of all products compared to Latvia.
A. an absolute advantage and a comparative advantage
B. an absolute advantage but not a comparative advantage
C. a comparative advantage but not an absolute advantage
D. neither an absolute advantage nor a comparative advantage
Answer: B
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Tax laws treat all in-kind payments as taxable income to the employers
a. True b. False
Fresh Flour makes baking flour and sells its flour in 4 pound sacks or bags. The managers of Fresh Flour are considering whether the firm should make or buy the flour sacks. To make the sacks, Fresh Flour needs a $500,000 piece of equipment. Using this equipment, Fresh Flour can make a flour sack for $0.01 and, for simplicity, ignore taxes and assume that the $0.01 cost includes depreciation and
all other costs. Fresh Flour would finance the $500,000 investment using its own funds and, if it purchased the flour sacks from another firm, it would pay $0.19 a flour sack. The life span of the equipment is 10 years and it has no salvage value at the end of the ten years. If the discount rate is 6 percent and the firm needs 400,000 flour sacks a year, what is the present value of the equipment? A) $623,850 B) $459,250 C) $500,962 D) $529,926
An increase in real interest rates will increase saving and decrease aggregate demand, other things equal
a. True b. False Indicate whether the statement is true or false
Supply-side economists favor tax incentives that
A. Discourage infrastructure development. B. Encourage investment. C. Discourage saving and encourage spending. D. Increase the level of government regulation.