Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to trade four trucks for every airplane. Assuming Country A specializes in airplane production, which of the following combinations of goods could Country A consume?
A. (15 airplanes, 20 trucks)
B. (10 airplanes, 20 trucks)
C. (10 airplanes, 30 trucks)
D. (5 airplanes, 20 trucks)
A. (15 airplanes, 20 trucks)
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Offering an expensive engagement ring to your (future) bride is a
a. Screening mechanism b. Signaling mechanism c. Way to waste money d. None of the above
Exhibit 2-13 Production possibilities curve
In Exhibit 2-13, in terms of efficiency:
A. point A is preferred to point B. B. point A is preferred to point E. C. point A is preferred to point D. D. point B is preferred to point A.
The principle of comparative advantage states that countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners.
Answer the following statement true (T) or false (F)
The index most widely used by the government and the private sector to measure changes in the cost of living is the:
A. Producer Price Index. B. Consumer Price Index. C. the GDP deflator. D. the chain-weighted price index.