Refer to Figure 2-12. Which country has a comparative advantage in the production of milk?
A) They have equal productive abilities. B) Bora Bora
C) Tahiti D) neither country
C
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If the quantity of money grows at 4 percent a year, velocity grows at 2 percent, and real GDP grows at 2 percent a year, then the inflation rate equals
A) 0 percent. B) 8 percent. C) 4 percent. D) 2 percent. E) 6 percent.
Price elasticity of demand measures
A) how responsive sales are to a change in buyers' incomes. B) how responsive quantity demanded is to a change in price. C) how responsive sales are to changes in the price of a related good. D) how responsive suppliers are to price changes.
If you exhibit the endowment effect as a decision maker, then you are
A) consuming based on celebrity endorsements. B) deciding on the basis of sunk costs. C) buying something you can't really afford because you expect to save in the future. D) ignoring non-monetary opportunity costs.
If Chris pays $500 for a bond that will return $750 in one year, what is the interest rate?
a. 50 percent b. 10 percent c. 25 percent d. 250 percent e. 33 percent