Two nations have the following production capacity given their endowment of resources. Country A can produce 50 units of beer or 80 units of pizzas. Country B can produce 100 units of beer or 90 units of pizzas. Which of the following statements is most appropriate?
A. Country A has a comparative advantage in beer and Country B has an absolute advantage in pizzas.
B. Country A has a comparative advantage in pizza and Country B has a comparative advantage in beer.
C. Country A should specialize in pizza and Country B in beer making.
D. Both answers b and c are correct.
Ans: D. Both answers b and c are correct.
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In the United States, government policies with respect to monopolies and collusion are embodied in
A) common law, which the United States adopted from English law. B) the Supreme Court. C) antitrust laws. D) the U.S. Constitution.
Bonds can be risky investments because
A. bondholders are paid from whatever remains after stockholders have been paid what the corporation owes them. B. if the corporation loses its assets, the bondholders may not receive payment on their investments. C. the general price level may fall. D. the voting power of an individual bondholder may be more apparent than real.
A monopolist can charge a high price if:
a. the quantity demanded of its product is positively related to price. b. the demand for its product is relatively price-elastic. c. the demand curve for its product is negatively sloped. d. the demand for its product is relatively price-inelastic. e. there exist a large number of substitutes for its product.
Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick?
a. a negative income tax b. an Earned Income Tax Credit (EITC) c. an in-kind transfer program d. None of the programs would be favored by Nozick.