Refer to Table 2-16. Estonia has a comparative advantage in the production of
A) cell phones. B) both products. C) lumber. D) neither product.
C
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Explain the difference between increasing marginal returns and economies of scale
What will be an ideal response?
To reduce moral hazard problems, banks include restrictive covenants in loan contracts. In order for these restrictive covenants to be effective, banks must also
A) monitor and enforce them. B) be willing to rewrite the contract if the borrower cannot comply with the restrictions. C) trust the borrower to do the right thing. D) be prepared to extend the deadline when the borrower needs more time to comply.
Which of the following situations is represented by a nearly horizontal supply curve for a good?
a. Small price changes lead to small changes in quantity demanded of the good. b. Small price changes lead to small changes in quantity supplied of the good. c. Producers of the good are not operating efficiently. d. Producers of the good are not maximizing profit. e. Small changes in the price of the good lead to large changes in the quantity supplied of the good.
Implicit costs are costs that:
A. represent forgone opportunities. B. do not depend on the quantity of output produced. C. require a firm to spend money. D. depend on the quantity of output produced.