Comparative advantage stems from a difference in
A. relative efficiency.
B. absolute efficiency.
C. natural endowment.
D. tastes of consumers.
A. relative efficiency.
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An option that gives the owner the right to buy a financial instrument at the exercise price within a specified period of time is a
A) call option. B) put option. C) American option. D) European option.
If the cost of capital increases the isocost line will
A) stay the same. B) shift outward in parallel fashion. C) rotate inward around the point where only labor is employed in production. D) shift inward in parallel fashion.
Suppose that only two goods are produced in an economy. If a country possesses the comparative advantage in the production of one good then it:
A. must also possess the comparative advantage in the production of the other good. B. must also possess the absolute advantage in the production of that good. C. cannot also possess the comparative advantage in the production of the other good. D. cannot also possess the absolute advantage in the production of that good.
Suppose a firm purchases new equipment to replace worn-out equipment at its factory. This purchase of new equipment is considered
A. inventory investment. B. durable consumption goods. C. gross private domestic investment. D. none of these.