Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can produce a maximum of eight pies or two cakes in a day. Fred has an comparative advantage in the production of
A) cakes.
B) pies.
C) both cakes and pies.
D) neither cakes nor pies.
A
You might also like to view...
The idea of policy making taking place in response to a predetermined set of rules is referred to as
A) active policy making. B) discretionary policy making. C) passive policy making. D) Keynesianism.
Models are simplifications that are used to observe the workings of a system
a. True b. False Indicate whether the statement is true or false
Exhibit 7-9 Cost schedule for firm X OutputQuantity Total FixedCost Total VariableCost 0 $100 $ 0 1 100 50 2 100 84 3 100 108 4 100 127 5 100 150 As shown in Exhibit 7-9, the total cost of producing 4 units is:
A. zero. B. $227. C. $250. D. $100.
The model predicts that a temporary increase in government purchases causes:
a. an increase in consumption. b. a reduction in gross investment. c. a reduction in real GDP. d. all of the above.