If a nation has a comparative advantage in the production of good X, this means that the nation
A. cannot benefit by producing and trading this product.
B. gives up less of alternative goods than other nations in producing a unit of X.
C. has a production possibilities curve identical to those of other nations.
D. is not subject to opportunity costs in producing good X.
B. gives up less of alternative goods than other nations in producing a unit of X.
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The positive relationship between short-run aggregate supply and the price level indicates that, in the short run
A) firms produce more output as the price level falls. B) firms produce more output as the price level rises. C) the money wage rate increases when moving along the short-run aggregate supply curve. D) lower price levels are more profitable for firms.
Standard economic theory asserts that sunk costs are irrelevant in making economic decisions, yet studies conducted by behavioral economists reveal that sunk costs often affect economic decisions. Which of the following could explain this observation?
A) Even though sunk costs cannot be recovered, it has been incurred and therefore should be treated as part of the product's value. B) People measure the value of a good in terms of its purchase price. C) Sunk costs have a higher opportunity cost than costs that can be recovered. D) If consumers maximize their utility, it makes sense to consider the full purchase price of a product in their consumption decisions.
An increase in the interest rate tends to increase the demand for loanable funds
a. True b. False
If a 10 percent increase in the price of product X causes the demand for product Y to decrease by 15 percent, then:
A. X and Y are substitutes. B. X and Y are independent goods. C. the demand for X is elastic. D. X and Y are complements.