If country X can produce a unit of good 1 at a lower opportunity cost than can country Y, it is correct to state that country X
A) has a comparative advantage in producing good 1.
B) has an absolute advantage in producing good 1.
C) will import good 1 from country Y.
D) will not produce good 1.
Answer: A
You might also like to view...
Which of the following is true?
A) The Cobb-Douglas production function exhibits increasing returns to scale. B) The sum of the coefficients of capital and total efficiency units of labor in a Cobb-Douglas production function is less than 1. C) The Cobb-Douglas production function exhibits constant returns to scale. D) The sum of the coefficients of capital and efficiency units of labor in a Cobb-Douglas production function is greater than 1.
In return for their services in the primary securities market, investment banks earn a fee called a(n)
A) underwriting spread. B) bid-asked spread. C) dealer's spread. D) broker's spread.
Time lags can cause economic policy to affect the economy after the underlying problems have changed.
Answer the following statement true (T) or false (F)
If the average total cost of supplying a good exceeds the price at which the good can be sold, then entrepreneurs have:
A. an incentive to raise the average total cost of producing the good. B. no incentive to supply the good. C. an incentive to supply only a small amount of the good. D. an incentive to supply the good.