Suppose Russia can produce either 600 pianos or 400 HDTVs, and Italy can produce either 300 pianos or 150 HDTVs. Implicitly, Russia has
A. Both an absolute and a comparative advantage in HDTVs.
B. Neither a comparative nor an absolute advantage in HDTVs.
C. An absolute but not necessarily a comparative advantage in HDTVs.
D. A comparative but not necessarily an absolute advantage in HDTVs.
Answer: D
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A. 0. B. 1. C. 2. D. 3.
In the Keynesian model with government and the foreign sector added, what are the components of spending? Which of these components are autonomous and which are not? How is the equilibrium found?
When the economy is not at an equilibrium, what adjustments are made?
Assume that an oligopolist has a kinked demand curve. Suppose that the marginal cost curve passes through the gap in the marginal revenue curve. This means price and output will be shown by a point:
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