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

Economics

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Tax laws treat all in-kind payments as taxable income to the employers

a. True b. False

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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

Economics

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

Economics

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.

Economics