Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. Amy has a comparative advantage in producing ________, and Mike has a comparative advantage in producing ________.
A. cars; cheese
B. cheese; cheese
C. cars; cars
D. cheese; cars
Answer: A
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Which of the following leads to an increase in real GDP?
A) a decrease in the inflation rate in other countries relative to the inflation rate in the United States B) a decrease in interest rates C) a decrease in government spending D) Households have increasingly pessimistic expectations about future income.
The method of payment that a principal can use to elicit effort from an agent is called:
a. a contract. b. an order. c. an incentive. d. garbling.
If domestic residents are restricted in their ability to purchase foreign assets then their government is imposing:
A. controls on capital outflows. B. controls on both capital inflows and outflows. C. fixed exchange rates. D. controls on capital inflows.
In the 1970s, the U.S. relied on Command-and-Control models of pollution regulation.
A. True B. False C. Uncertain