If it takes one country two units of labor to produce a computer and three units of labor to produce a TV, but it takes the other country three units of labor to produce a computer and four to produce a TV, then the first country has
A. an absolute advantage in TVs and computers but a comparative advantage in TVs only.
B. a comparative advantage in both goods.
C. an absolute advantage in TVs and computers but a comparative advantage in computers only.
D. an absolute advantage in TVs but a comparative advantage in computers.
Answer: C
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The fact that people have unlimited wants means that
a. they always want more of at least one good b. each person has an unlimited desire for every good c. labor unions demand wage increases d. selfish people are not concerned about others e. people buy goods without regard to what they can afford
Which of the following conditions must hold if a consumer is maximizing her utility?
A. MUX × PX = MUY × PY B. MUX = MUY C. MUX/PY = MUY/PX D. MUX/PX = MUY/PY
Suppose the government attempts to stimulate the economy by increasing spending without increasing taxes. Which of the following statements is most likely to be accepted by someone who believes in crowding out?
A) The government's actions will have their intended effect. B) The government's actions will cause businesses to become more optimistic about the economy, and they will increase their output even more than the government had intended. C) The government's actions will raise interest rates, causing decreased investment and consumption, and the economy will not expand as much as the government had intended. D) This is a trick question, because the federal government is required by law to increase taxes by the same amount as it increases expenditures.
A radio station is best described as
A. a platform in a shared-input market. B. an end user in a transaction-based market. C. a platform in an audience-making market. D. an end user in a matchmaking market.