Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities
A) Blue Violet has a comparative advantage in teapots.
B) Sweet Pansy has a comparative advantage in teapots.
C) Both have a comparative advantage in teapots.
D) Sweet Pansy has an absolute advantage in teapots.
A
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If you believe that velocity is constant and that the aggregate supply curve is vertical, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of
A. nominal output and real output. B. nominal output and no change in real output. C. real output and no change in nominal output. D. the price level and real output.
In the Baumol-Tobin analysis of transactions demand for money, either an increase in ________ or a decrease in ________ increases money demand
A) income; interest rate B) interest rates; brokerage fees C) brokerage fees; income D) interest rate; income
The idea that every Pareto efficient allocation is the competitive equilibrium for some initial allocation of resources is known as:
A. the first welfare theorem. B. the second welfare theorem. C. the third welfare theorem. D. the exchange efficiency condition.
The increase in unemployment associated with a recession is called