Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?
a. Alland has both a comparative and absolute advantage in producing food.
b. Alland has comparative advantage, but not an absolute advantage, in producing food.
c. Georgeland has both a comparative and absolute disadvantage in producing clothing.
d. Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
d. Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
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The price elasticity of demand for a good measures the responsiveness of:
A. quantity demanded to a one percent change in price of that good. B. price to a one percent change in the demand for that good. C. price to a one percent change in the quantity demanded of that good. D. demand to a one percent change in price of that good.
An increase in the costs of resources or inputs of production would shift the:
A) short-run aggregate supply curve rightward. B) short-run aggregate supply curve leftward. C) long-run aggregate supply curve rightward. D) long-run aggregate supply curve leftward.
In the long run, a monopolistically competitive firm that trades internationally ____________ than it would in autarky.
a. will produce more output b. will earn more monopoly profits c. will have higher average costs d. will produce more output and earn more monopoly profits
In the quantity theory of money:
A. the price level is a function of the supply of money. B. the supply of money is a function of the price level. C. the money supply and the price level are inversely related. D. velocity is always half of the price level.