Based on Scenario 1 above critically evaluate the following statement. "Because of the productivity differential between the two men we can conclude that the young man has a comparative advantage in the production of everything over the older man
What will be an ideal response?
This statement is not true. Comparative advantage is achieved by being able to produce a good or service at a lower opportunity cost than someone else can. Here the only information that we have is that the young man is more productive than the older man. This isn't sufficient information to conclude that he has a comparative advantage in the production of everything.
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Which of the following statements is correct?
A. When marginal utility is positive, an increase in the quantity consumed will increase total utility. B. When marginal utility is zero, an increase in the quantity consumed will make total utility zero. C. When marginal utility is decreasing, an increase in the quantity consumed will decrease total utility. D. When marginal utility is positive, an increase in the quantity consumed will decrease total utility.
A public authority that provides banking services to commercial banks and regulates financial institutions and markets is called a
A) commercial bank. B) thrift institution. C) central bank. D) money market fund. E) mint.
When the economy enters a prosperity phase, personal income tax collections
a. fall along with consumption and real GDP b. rise along with real GDP but unemployment insurance payments to workers fall c. rise but real GDP and unemployment insurance payments to workers fall d. fall along with real GDP but unemployment insurance payments to workers rise e. fall causing real incomes and employment to fall
American producers often complain about dumping. What is dumping, and should it be prohibited?