Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria. We can conclude that
A) Labor costs are higher for sandal producers in Finland than in Bulgaria.
B) Bulgaria also has an absolute advantage in producing sandals relative to Finland.
C) Bulgaria has a lower opportunity cost of producing sandals relative to Finland.
D) Finland has an absolute disadvantage in producing sandals relative to Bulgaria.
C
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An advantage of the personal consumption expenditures price index (PCE) over the Consumer Price Index (CPI) as a measure of inflation is that the PCE
A) is a fixed market-basket price index that does not allow the mix of products to change each year. B) includes the prices of consumer services, but not consumer goods. C) includes the prices of more consumer goods and services. D) includes the prices of consumer goods, but not consumer services.
The extensions of life expectancy from improved heart procedures and medications over the twentieth century illustrate
A) The problem of non-market transactions being excluded from GDP calculations B) How price measures like the CPI do not fully account for important items like energy C) How price measures like the CPI do not fully account for the important quality changes D) How price measures like the CPI do not take account of the way consumers substitute lower price items for higher price items
The figure above shows the production possibilities frontier for a country. In order for it to move from producing at point A to producing at point B, the country would need to incur an opportunity cost of
A) 4 million SUVs. B) 3 million SUVs. C) 1 million SUVs. D) 3 million compact cars. E) 0 because the gain in compact cars exceeds the loss in SUVs.
Refer to above Table 2-1. What is the level of Gross Domestic Product?
A) 2690 B) 3050 C) 2430 D) 3010