Japan and China produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will
a. import guns.
b. have a comparative advantage in guns.
c. have an absolute advantage in guns.
d. have a comparative advantage in rice.
b
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The sum of personal consumption expenditure, investment expenditure, government expenditure, and net export expenditure on the total amount of real output in the economy in a given period of time is called:
A) potential GDP. B) aggregate expenditure. C) real money balances. D) none of the above.
A rational individual would make charitable contributions only if such contributions receive favorable tax treatment
a. True b. False
Asymmetric information arises when:
a. both the parties to an exchange have perfect information about the good. b. none of the parties to exchange have any information about the good. c. one party to an exchange knows more than the other party. d. a good is provided by the government. e. the market is perfectly competitive.
Frederic Bastiat formulated
A. the theory of absolute advantage. B. the theory of comparative advantage. C. the petition of the candlemakers to shut out the sun. D. the infant industry argument.