Figure 34-5
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From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that
A. Japan has an absolute advantage in TVs and computers, but a comparative advantage only in TVs.
B. Japan has only a comparative advantage in TVs.
C. Japan has an absolute advantage in both TVs and computers, but a comparative advantage only in computers.
D. China has a comparative advantage in computers.
Answer: C
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When the aggregate demand curve and the short-run aggregate supply curve intersect,
A) the economy is in short-run macroeconomic equilibrium. B) inflation must be increasing. C) structural and frictional unemployment equal zero. D) the long-run aggregate supply curve must also intersect at the same point.
Explain the difference between diminishing returns to labor and diminishing marginal returns to labor
What will be an ideal response?
Rent seekers are those who seek to
a. use the government to protect their existing property interests b. use the government to change the rules of the market game in their favor c. convert public land into private land d. convert public resources into private resources e. maximize their own private gains from trade