If a good has “snob appeal,” consumers may purchase less when the price falls.

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true concerning comparative advantage between the two countries?

a. Denmark has the comparative advantage in watches and cheese. b. Germany has the comparative advantage in watches and cheese. c. Germany has the comparative advantage in watches. d. Denmark has the comparative advantage in watches. e. Denmark has the comparative advantage in cheese.

The short-run equilibrium output of a competitive firm is found by equating marginal cost with price

a. True b. False Indicate whether the statement is true or false