Having an absolute advantage in the production of a good implies that a country
a. should specialize in the production of the good
b. is able to produce the good with fewer resources than another country
c. should not specialize in the production of the good
d. also has the comparative advantage in the production of the good
e. cannot have an absolute advantage in the production of the good
B
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Comparative risk analysis is
a. a risk assessment strategy c. a risk characterization approach b. a risk management strategy d. none of the above
Use the following information to answer the next question. Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. What is the economic profit generated by Extreme Gaming in the first year?
A. $160,000 B. $280,000 C. $220,000 D. $155,000
Firms in Saudi Arabia sell oil to the U.S. Other things the same, these oil sales
a. increase Saudi net exports and net capital outflow. b. decrease Saudi net exports and net capital outflow. c. increase Saudi net exports and decrease Saudi net capital outflow. d. decrease Saudi net exports and increase Saudi net capital outflow.
Which of the following represents a short-run cubic production function?
A. Q = aK3L3 + bK2L2
B. Q = AL3 + BL2 (where A = a
3, B = b
2)
C. Q = 3AL2 + 2BL (where A = a
3,B = b
2)
D. Q = AL2 + BL (where A = a
3, B = b
2)
E. all of the above