Does having an absolute advantage in producing both goods mean that you’re guaranteed to have a comparative advantage in both goods? Explain your answer.
What will be an ideal response?
No, having an absolute advantage in producing both goods does not mean you’ll have a comparative advantage in both. Comparative advantage in production depends on the opportunity cost in producing that good. Even if one has an absolute advantage producing good A, they may have to produce it at a higher opportunity cost from not producing good B than their competitor.
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Which of the following is a consequence of free riders?
A. The government always steps in to produce the good or service. B. The good or service is produced regardless. C. The good or service is never produced because not enough people paid to use it. D. Consumers are better off by not having the good or service be produced.
Economic indicators, like unemployment claims and the average workweek, which change before real GDP changes, are called:
a. leading. b. lagging. c. coincident. d. structural.
The real interest rate is the annual percentage amount of money that is earned on a sum loaned or deposited in a bank
a. True b. False Indicate whether the statement is true or false
Which of the following types of income are subject to FICA taxes?
A. Capital gains B. Tips C. Interest income D. Inheritance