Refer to Table 2-10. Which of the following statements is true?
A) Barney has a comparative advantage in making unicycles and Fred in making pogo sticks.
B) Barney has a comparative advantage in making pogo sticks and Fred in making unicycles.
C) Barney has a comparative advantage in making both products.
D) Fred has a comparative advantage in making both products.
A
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So long as marginal cost is greater than average variable cost, both average variable cost and average total cost must increase as output is increased
Indicate whether the statement is true or false
The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to just one type of customer b. the costs of arbitraging the price difference across markets is small c. the manufacturer acquires the distributer in the higher priced market d. competition provides little ability for the manufacturer to price above marginal cost
The real wealth and the real interest rate effects are both causes of the downward slope of the aggregate demand curve
a. True b. False Indicate whether the statement is true or false
Which of the following occurs as the economy moves leftward along a given IS curve?
A) An increase in the interest rate causes investment spending to decrease. B) An increase in the interest rate causes money demand to increase. C) An increase in the interest rate causes a reduction in the money supply. D) A reduction in government spending causes a reduction in demand for goods. E) An increase in taxes causes a reduction in demand for goods.