Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the comparative advantage in the production of:
A. tablets only.
B. neither iPods nor tablets.
C. iPods only.
D. both iPods and tablets.
Answer: A
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A normal profit for a self-employed entrepreneur is I. an opportunity cost. II. part of the implicit rental rate of the funds invested in the business
A) only I B) only II C) both I and II D) neither I nor II
If rational workers and firms know that the Federal Reserve is following a contractionary monetary policy, they will expect inflation to ________ and will adjust wages so that the real wage ________
A) increase; decreases B) decrease; increases C) increase; remains unchanged D) decrease; remains unchanged
If goods are completely unrelated, their cross price elasticity will
A. be negative. B. be less than one. C. be greater than one. D. be equal to zero.
Of the following, demand is likely to be the least elastic for
A) Ford automobiles. B) Toyota automobiles. C) compact disc players. D) toothpicks.