If, with one unit of labor, the U.S. can produce 20 units of computer software and 10 units of computer hardware, and China can produce 6 units of software and 4 units of hardware, then
A. the United States has a comparative and absolute advantage in both goods.
B. China has a comparative advantage in hardware and the U.S. has a comparative advantage in software.
C. China has a comparative and absolute advantage in both goods.
D. the United States has a comparative advantage in both goods.
Answer: B
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The payments you make on your automobile loan are given in terms of dollars. As prices rise you notice you give up fewer goods to make your payments
a. The dollar amount you pay is a nominal value. The number of goods you give up is a real value. b. The dollar amount you pay is a real value. The number of goods you give up is a nominal value. c. Both the dollar amount you pay and the goods you give up are nominal values. d. Both the dollar amount you pay and the goods you give up are real values.
In what way does inflation redistribute wealth?
A. Inflation redistributes wealth from lenders to borrowers. B. Inflation redistributes wealth from long-term borrowers to short-term borrowers. C. Inflation redistributes wealth from borrowers to lenders. D. Inflation redistributes wealth from short-term borrowers to long-term borrowers.
Refer Exhibit 2-10. Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.
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Fill in the blank(s) with the appropriate word(s).
In the real world, the K/Y ratio
A) is much higher in rich countries than in poor countries. B) is much lower in rich countries than in poor countries. C) is roughly equal across rich and poor countries. D) cannot be properly compared except between countries of similar income levels.