Carlos is an executive of a major corporation. Boris is a baker. Carlos earns a salary ten times as large as the salary Boris earns, and Carlos has a much larger oven for baking break. Carlos can make a loaf of bread that tastes better than Boris's bread
but Boris can bake faster.
A) Carlos has an absolute and comparative advantage over Boris in making bread.
B) Carlos has an absolute but not comparative advantage over Boris in making bread.
C) Carlos had a comparative but not absolute advantage over Boris in making bread.
D) Carlos does not have an absolute or comparative advantage over Boris in making bread.
Answer: B
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Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Morocco consume?
A) 60 B) 75 C) 135 D) 200
According to standard economic theory, rational individuals:
A. suffer from psychological failure. B. never do what is in their own best interest. C. always do what is in their own best interest. D. do what is in their best interest only part of the time.
Which one of the following is true about the U.S. Federal Reserve System?
A. There are 14 members of the Federal Reserve Board. B. The head of the U.S. Treasury also chairs the Federal Reserve Board. C. There are 10 Federal Reserve Districts. D. The Federal Open Market Committee (FOMC) has more members than does the Federal Reserve Board of Governors.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases B. remains constant. C. initially increases, then decreases. D. decreases.