According to the concept of comparative advantage, a good should be produced in that nation in which
A. terms of trade are maximized.
B. domestic opportunity cost is the smallest.
C. money is used.
D. domestic opportunity cost is greatest.
Answer: B
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In the above figure, the distance between points S and T represents
A) an expansion. B) a trough. C) a peak. D) a recession.
An appreciation of a country's currency
A) decreases the relative price of its exports and lowers the relative price of its imports. B) raises the relative price of its exports and raises the relative price of its imports. C) lowers the relative price of its exports and raises the relative price of its imports. D) raises the relative price of its exports and lowers the relative price of its imports. E) raises the relative price of its exports and does not affect the relative price of its imports.
If hiring the 7th worker increases total product by 5 units and the price of each unit is $2,
a. the firm should not hire the 7th worker as MB
If the actual price level exceeds the expected price level reflected in long-term contracts,
a. many firms will find production more profitable than they had expected and will increase the quantity of output supplied. b. many firms will find production less profitable than they had expected and will decrease the quantity of output supplied. c. many firms will find production more profitable than they had expected and will decrease the quantity of output supplied. d. many firms will find production less profitable than they had expected and will increase the quantity of output supplied.