How do countries know when they have a comparative advantage in the production of a good?
A) Government accountants collect cost data from countries and analyze it to find out which country has a comparative advantage in the production of which good.
B) They know as the result of individuals trying to earn profits and buying low and selling high in the process.
C) The United Nations Economic Conference Group analyzes cost data from countries and determines which country has a comparative advantage in the production of which good.
D) There is not one major way that countries acquire this information.
B
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From the late 1960s to the late 1980s, SAT scores in the United States
a. help explain the productivity increases. b. rose consistently throughout the period. c. declined throughout the period. d. indicated improving workforce quality.
Suppose the cost of medical care rose 200 percent from 1990 to 2010, and average prices for the economy rose 150 percent. Relative to others, people who purchased medical care experienced a:
A. Lower real income as a result of the price effect. B. Higher real income as a result of the price effect. C. Lower real income as a result of the wealth effect. D. Higher real income as a result of the wealth effect.
Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, then one would expect to see:
A. a decrease in the demand for pasta. B. an increase in the quantity of pasta demanded. C. an increase in the demand for pasta. D. a decrease in the quantity of pasta demanded.