If the share of population employed in two countries is the same, average living standards will be higher in the country with:
A. higher average labor productivity.
B. lower average labor productivity.
C. the larger population.
D. the smaller population.
Answer: A
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According to the classical model, there is no need for government intervention in the economy. if the economy is left alone, full employment output will eventually occur
a. True b. False
If nation A has an absolute advantage over nation B in the production of a product, this implies that
a. it requires fewer resources in A to produce the good than in B. b. the cost of producing the good in terms of some other good's production that must be sacrificed is lower in A than in B. c. nation B could not benefit by engaging in trade with A. d. nation A should acquire this product by trading with B. e. nation A could not benefit by engaging in trade with B.
The minimum wage, if it is binding, lowers the incomes of
a. no workers. b. only those workers who become unemployed. c. only those workers who have jobs. d. all workers.
If H represents the number of hours spent on an activity, then which of the following could represent a total benefit function?
A. 400H - 30H2 B. 400H + 30H2 C. -400H - 30H2 D. -400H + 30H2