According to this Application, workers in the EU were more productive than workers in Latvia in the 1990s, yet EU nations still purchased products from Latvia. This is because Latvia ________ in the production of the products it sold to EU nations
A) used fewer resources B) had a higher opportunity cost
C) had an absolute advantage D) had a comparative advantage
D
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How do economic growth rates affect a nation's standard of living?
What will be an ideal response?
The concept of adverse selection helps to explain
A) why collateral is not a common feature of many debt contracts. B) why large, well-established corporations find it so difficult to borrow funds in securities markets. C) why financial markets are among the most heavily regulated sectors of the economy. D) why stocks are the most important source of external financing for businesses.
The midpoint method is used to compute elasticity because it
a. automatically computes a positive number instead of a negative number. b. results in an elasticity that is the same as the slope of the demand curve. c. gives the same answer regardless of the direction of change. d. automatically rounds quantities to the nearest whole unit.
A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is
A) income elastic. B) income inelastic. C) price elastic. D) price inelastic. E) none of the above