Many call centers that provide telephone customer services for U.S. companies have been established in India, but few or none have been established in China. Why?
A. China lacks the political infrastructure to support call centers.
B. China is at a more advanced stage of economic development than India.
C. Indian labor costs are lower than Chinese labor costs.
D. Chinese labor lacks the specific language skills needed to make call centers profitable in China.
Answer: D
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When economists say goods are scarce, they mean
a. consumers are too poor to afford the goods and services available. b. consumers are unwilling to buy goods unless they have very low prices. c. goods are generally freely available from nature in most countries. d. the desire for goods and services exceeds our ability to produce them with the limited resources available.
Which of the following is not an example of the adverse selection problem?
A. Buyers in a market for used cars must choose from an undesirable selection of used cars. B. An insurance company must choose one price for its coverage for both high-cost and low-cost people. C. Commercial banks would rather use credit rationing than raising interest rates in the presence of excess demand for loans. D. An insured motorist drives more recklessly.
Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?
A. an outcome in which an individual can choose to specialize in a certain line of work and be certain that he or she can make a living at that until retirement B. an outcome in which resources are devoted to their most efficient use C. an outcome in which wages are roughly equal around the world D. an outcome in which the standard of living is roughly equal around the world
Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of beer is
A. the 2 gallons of wine that must be forgone. B. the 0.5 gallons of beer that must be forgone. C. the 2 gallons of beer that must be forgone. D. the additional 0.5 gallons of beer that can be produced.