Jimbo has a comparative advantage over Ned in producing a good if:
A. Jimbo can produce more of the good than Ned can in a given time period.
B. Jimbo has a lower opportunity cost of producing the good than does Ned.
C. Jimbo has to trade off more than Ned does to produce the good.
D. Jimbo has a higher opportunity cost of producing the good than does Ned.
Answer: B
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A) 45 percent; 55 percent B) 55 percent; 4 percent C) 25 percent; 50 percent D) 50 percent; 30 percent
Consider an industry that is in long-run equilibrium. An increase in demand leads to a decrease in the price of the good. We know that this is
A) a decreasing cost industry. B) a constant cost industry. C) an increasing cost industry. D) not a competitive industry.
In 2011, the poverty rate in the United States was
a. 5.9 percent. b. 11.1 percent. c. 15.0 percent. d. 22.4 percent.
Which of the following is always TRUE of rational behavior?
A. It always yields the best possible outcome for all individuals. B. It never involves taking into account the interests of others. C. It always entails pursuing one's own best interest. D. It never involves the pursuit of greedy self-interest.