Refer to Table 5.1. Andrea has a comparative advantage in the production of

The shape of a firm's long-run average cost curve is determined by:

a. the degree to which each input encounters diminishing marginal productivity. b. the underlying nature of the firm's production function when all inputs are able to be varied. c. how much the firm decides to produce. d. the way in which the firm's expansion path reacts to changes in the rental rate on capital.

The U.S. is able to maintain a large trade deficit because:

A. when the business cycle is in a boom, it will be a trade surplus. B. it is balanced by a large capital surplus. C. it is balanced by a large capital deficit. D. None of these statements is true.