What are the sources of a country's comparative advantage?
What will be an ideal response?
The factors that contribute most to comparative advantage at the country level are:
i. Natural resources and stocks of man-made resources (technology) available
ii. Education and experience of the labor force
iii. Relative abundance of labor and capital
iv. Climate
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Which of the following is a key question that must be addressed by an economy?
A) What will be made with our resources? B) How much will we spend producing products? C) Where will we produce our products? D) When should we produce our products?
You want to invest in a firm whose profits show large fluctuations throughout the business cycle. Which of the following would you invest in?
A) A corporation that depends heavily on business fixed investment B) A corporation that depends heavily on consumer services C) A corporation that depends heavily on consumer nondurables D) A corporation that depends heavily on government purchases
Behavioral assumptions
a. make economic models more complex than if these assumptions were removed b. pertain only to consumers c. hold all other things constant d. are ways to test a hypothesis e. describe how individuals are expected to behave
Why is bundling of unrelated products, one of which is available in the competitive market, a losing strategy?