Consider the following information, and assume that opportunity costs are constant: On one hand, residents of Country A can produce more corn in a year than residents of Country B, but they can produce computers at a lower opportunity cost than residents of country B. On the other hand, residents of country B can produce more computers in a year than residents of Country A, but they can produce corn at a lower opportunity cost than residents of country A. It can be concluded that residents of
A. Country B should produce computers and trade them for corn produced in Country B.
B. Country A should produce computers and trade them for corn produced in Country B.
C. Country A should produce corn and trade it for computers produced in Country B.
D. both countries should choose not to trade.
Answer: B
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Real GDP per person in both Alpha and Omega is equal to $2,000. Over the next 100 years, real GDP per person grows at a 1.5 percent annual rate in Alpha and at a 2.5 percent annual rate in Omega. After 100 years, real GDP per person in Alpha is ________ smaller than real GDP per person in Omega.
A. $2,000 B. $8,864 C. $5,410 D. $14,763
A student who just graduated from college but has not found a job would most likely be
A) cyclically unemployed. B) frictionally unemployed. C) seasonally unemployed. D) structurally unemployed.
An unregulated electric company is a monopolist and faces demand of Q = 50 - 10P. If the company has zero marginal costs, its profit-maximizing price is
a. 0 b. 1 c. 2.5 d. 5
To predict the effects of a tax cut on consumption spending, economists must have some estimate of the
a. income effect. b. substitution effect. c. relative price effect. d. marginal propensity to consume.