If Wendy can produce more of all goods than Tommy in an hour, then
A) Wendy has an absolute advantage in all goods.
B) Wendy does not need to trade with Tommy in order to achieve the gains from trade.
C) Wendy has a comparative advantage in all goods.
D) Tommy has an absolute advantage in all goods.
E) Only Tommy but not Wendy can benefit from trade between the two of them.
A
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Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.
Referring to the Production Possibilities Frontiers in Figure 1.10 A, B, C, and D, which depicts specialized growth in pizza when there is constant opportunity cost?
Figure 1.10
A. Fig. A B. Fig. B C. Fig. C D. Fig. D
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What will be an ideal response?
The slopes of the production possibilities curves for two nations reflect the:
A. Relative prices of the resources in the two nations B. Amounts of imports and exports of the two nations C. Average income levels in the two nations D. Opportunity costs of production in the two nations