Given two economic systems, A and B, if economy A has an absolute advantage in the production of widgets, then
A. fewer inputs are necessary to produce widgets in economy A than in economy B.
B. economy A is less efficient in the production of widgets than economy B.
C. economy A would not benefit from the specialization of production.
D. economy A must give up less of all other goods to produce widgets than economy B.
Answer: A
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An aggregate production function shows the relationship between
A) real GDP and leisure. B) real GDP and the quantity of labor employed. C) leisure and unemployment. D) real GDP and unemployment.
If profit-seeking entrepreneurs are going to be successful, they must
a. produce a product that the consumers value more than the resources required for its production. b. produce the product more cheaply than their rivals regardless of quality. c. maximize the salaries of high-level management so they will be able to attract people who will work hard. d. charge a higher price than their competitors so they can make economic profits in the long run.
Protectionism
In general we may note that inflation:
A. doesn't necessarily harm purchasing power. B. always decreases purchasing power. C. always increases purchasing power. D. should try to be avoided at all costs.