Which of the following statements is true for the two countries illustrated in Figure 35.1?
A. Japan has an absolute advantage in motorcycles, the United States in DVD players.
B. Japan has an absolute advantage in motorcycles.
C. The United States has a comparative advantage in motorcycles, Japan in DVD players.
D. The United States has a comparative advantage in DVD players.
Answer: D
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In the above figure, a shift in the budget line in the direction indicated would occur as a result of
A) a decrease in money income. B) an increase in money income. C) a fall in the price of a movie. D) a rise in the price of movie.
Most development economists agree that the most basic and important task of any government is to:
A. create a stable political system. B. provide national health care system. C. maintain a stable currency. D. ensure basic education for all citizens.
If actual output exceeds potential output for a prolonged period of time, we would eventually expect factor prices to:
A. fall, causing the LAS curve to shift in to the left. B. fall, causing the SAS curve to shift down (to the right). C. rise, causing the SAS curve to shift up (to the left). D. rise, causing the LAS curve to shift out to the right.
Which of the following goods is more likely to be excludable?
A) a chocolate bar B) a concert at Times Square C) national defense D) ocean breeze