Comparative advantage is determined by the
a. elasticities of demand for a good in two countries
b. opportunity costs of producing a good in two different countries
c. presence of absolute advantages in production
d. degrees of allocative efficiency within each economy
e. amounts of resources required to produce a good in different countries
B
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Which of the following equations represents investment spending in a closed economy?
a. I = Y + C – G b. I = Y – C – G c. I = Y – C + G d. I = Y/ (C – G)
The production possibilities curve shifts outward when
A) the law of increasing additional cost takes hold. B) the economy is producing efficiently. C) we produce more consumption goods over productive investment in equipment. D) there is an increase in resources or technology.
The formula for calculating the CPI is
A) (Expenditures in the current year/Expenditures in the base year) × 100. B) (Expenditures in the current year × Expenditures in the base year)/100. C) (Expenditures in the base year/Expenditures in the current year). D) (Expenditures in the base year × 100)/(Expenditures in the current year).
Which of the following will not result in a rightward shift of the market supply curve for labor?
a. an increase in immigration b. an increase in labor productivity c. an increase in the working-age population d. a decrease in nonwage income