Assume the US has a comparative advantage versus Brazil in producing large jets (LJs) while Brazil has a comparative advantage in producing small jets (SJs). The opportunity cost of producing another LJ is 2 SJ in the US and 4 SJ in Brazil. Without trade, the maximum number of LJs the US can produce is 60 and the maximum number of SJs the US can produce is 120. If the US and Brazil agree to trade at the rate of 1 LJ for 3 SJs, what is the maximum number of small jets that would be available in the US if the US produces all LJs and trades them all away to Brazil at the agreed upon rate of trade?
a) 20
b) 60
c) 120
d) 180
e) 360
d) 180
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A. producing differentiated products. B. producing where price equals marginal cost. C. making economic profits in the long run. D. producing at optimal productive efficiency.
In graphing the Solow growth model, the per-person production function is used to derive the ________ per-person line, with the vertical distance between them being ________ per person
A) national saving, investment B) national saving, consumption C) steady-state investment, capital D) steady-state investment, depreciation E) steady-state investment, national saving
In a large open economy ________
A) the effect of shifts in saving and investment on the trade balance are in the same direction as in a closed economy B) the effect of shifts in saving and investment on net capital flows are in the same direction as in a closed economy C) the effect of shifts in saving and investment on the domestic real interest rate and the actual levels of saving and investment are in the same direction as in a closed economy D) all of the above E) none of the above
If the fiscal policy makers aim to increase aggregate demand, they will likely enact:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. expansionary monetary policy. D. contractionary monetary policy.