Which of the following statements is true?
a. Economic theory does not make unrealistic assumptions.
b. Economists should not ignore details while focusing on complex problems.
c. Abstraction forms an important part of economic analysis.
d. The word theory means same for both economists and laymen.
c
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Suppose a consumer has an income of $800 per month and that she spends her entire income each month on beer and bratwurst. The price of a pint of beer is $5, and the price of a bratwurst is $4 . Which of the following combinations of beers and bratwursts represents a point that would lie to the exterior of the consumer's budget constraint?
a. 160 beers and 200 bratwursts b. 40 beers and 50 bratwursts c. 80 beers and 100 bratwursts d. 160 beers and 0 bratwursts
Refer to Mexico and Japan. Which of the following statements is true.
a. Mexico has a comparative advantage in production of food.
b. Japan has an absolute advantage in production of food.
c. Mexico has a comparative advantage in production of cloth.
d. Japan has an absolute advantage in production of Cloth.