The oldest theory of comparative advantage is based on:
a. factor abundance.
b. productivity differences.
c. product life cycles.
d. preferences.
e. human skills.
b
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Suppose that in October the price of a cup of cafe latte was $2.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 600 lattes were consumed. What might have caused this change?
A) The price of coffee beans (an input of production of cafe lattes) fell. B) The price of coffee beans (an input of production of cafe lattes) rose. C) The price of tea (a substitute for cafe lattes) rose. D) The price of tea (a substitute for cafe lattes) fell.
The margin requirement is the maximum percentage of the price of a(n)
a. bond that can be used as collateral to borrow from a bank b. investment good that can be used as collateral to borrow from a bank c. home mortgage that can be used as collateral to borrow from a bank d. stock that can be used as collateral to borrow from a bank e. an asset that can be used as collateral to borrow from the Fed
Which of the costs discussed in the chapter is the most important when a firm is deciding how much to produce?
A. Marginal cost because this cost shows the additional cost associated with producing one more unit of output. Firms will use this information to decide to produce more or less output. B. Variable costs because these costs change as output changes. If the firm wants to maximize profits, it will choose to produce a quantity where variable costs are minimized. C. Fixed costs because these costs are spent and cannot be changed in the time period under consideration. If fixed costs are higher, the firm will choose to produce more output. D. Costs that are spent to improve the image of the firm. A firm will choose to increase output if it spends a large amount on advertising and brand image.
Hypothetical Data for Nation X in Billions of Local Currency
Refer to the above table. Nation X has a balance of trade
A. surplus of 10 billions. B. deficit of 50 billions. C. surplus of 50 billions. D. deficit of 10 billions.