Which statement is true?
A. Comparative advantage and absolute advantage are identical terms.
B. A country can have a comparative advantage without having an absolute advantage.
C. The U.S. has a comparative advantage and an absolute advantage with nearly all of its trading partners.
D. Trade cannot take place unless each trading partner has an absolute advantage in the production of the good or service that it is trading.
B. A country can have a comparative advantage without having an absolute advantage.
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Suppose the daily demand for Coke and Pepsi in a small city are given by QC = 90 - 100PC + 400(PP - PC) and QP = 90 - 100PP + 400(PC - PP), where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can for both Coke and Pepsi. What is Pepsi's best response function?
A. QP = 200PC - 67.5 B. QP = (90 + 400PC) - 500PP C. PP = 0.315 + 0.4PC D. PP = (0.18 + 0.8PC) - 0.002QP
A firm's demand for labor is known as a "derived demand" because:
a. the firm gains utility from hiring more labor. b. the amount of labor hired depends upon how much output the firm can sell. c. the wage rate paid to workers is derived from the market for labor. d. it's derived from the demand for capital.
An economic boom in America should increase the
a. demand for U.S. dollars. b. demand for U.S. goods and services. c. demand for foreign currencies. d. supply of foreign currencies.
If a tax generates a reduction in surplus that is exactly offset by the tax revenue collected by the government, the tax does not have a deadweight loss
a. True b. False Indicate whether the statement is true or false