Assume that the United States uses 20 worker-hours to produce 1 computer and 5 worker-hours to produce 1 unit of food; assume also that Japan uses 10 worker-hours to produce 1 computer and 30 worker-hours to produce 1 unit of food. Which of the following statements is true?
a. Japan has the comparative advantage in food production.
b. The United States has the comparative advantage in food production.
c. The United States has the absolute advantage in food production.
d. The United States has a lower opportunity cost for making computers.
e. Japan has a lower opportunity cost for making food.
b
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The marginal propensity to consume (MPC) is computed as the change in:
a. consumption divided by the change in savings. b. consumption divided by the change in income. c. consumption divided by the change in GDP. d. None of these.
Which of the following contributed to the crisis of 2008?
a. a doubling of the price of imported oil during 2007-2008 b. a sharp increase in the price of housing during 2008 c. inclement weather in 2008 d. falling resource prices and a reduction in the cost of production