If there are two goods and two countries, then one country can have
A. a comparative advantage in both goods.
B. a higher opportunity cost of producing both goods.
C. a lower opportunity cost of producing both goods.
D. a comparative advantage in only one good.
Answer: D
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According to the permanent income hypothesis, a person's consumption increases only when
A) the person's average lifetime income increases. B) the person saves more. C) the person's current income increases. D) the person's income increases unexpectedly.
Which one of the following economic activities was NOT generally undertaken in New England in the colonial period?
(a) Fishing (b) Farming (c) Tobacco production (d) Shipbuilding
One problem with employer mandated health insurance is _____
a. it increases the cost of hiring employees b. it makes it difficult to employ highly-skilled individuals c. it provides universal coverage d. it creates moral hazard
In the foreign exchange market, the exchange rate is volatile because the
A) factors that influence the supply of dollars also influence the demand for dollars. B) demand for dollars changes more frequently than the supply of dollars. C) both the demand curve for dollars and the supply curve of dollars are very flat. D) supply of dollars changes more frequently than the demand for dollars. E) None of the above is related to the volatility of the exchange rate.