Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?
a. Alland has both a comparative and absolute advantage in producing food.
b. Alland has comparative advantage, but not an absolute advantage, in producing food.
c. Georgeland has both a comparative and absolute disadvantage in producing clothing.
d. Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
d. Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
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Answer the following statements true (T) or false (F)
1. The "principal-agent problem" often arises in public choice when politicians pursue the best interests of their constituents. 2. In thinking about the "principal-agent problem" in a democratic government, we assign the role of "principal" to the government. 3. The special interest effect in government is the reason why firms in some industries are willing to pay huge amounts of money to lobbyists. 4. When the special-interest effect is the major reason for the passage of a government policy or project, then economic efficiency will always improve. 5. The "pork" in pork-barrel politics refers to government projects that politicians try to secure in favor of the common good for the whole nation.
If the long-run Phillips curve is vertical, then any government policy designed to lower:
A. unemployment will not change the unemployment rate and only increase the inflation rate. B. unemployment will work leaving the inflation rate unchanged. C. inflation will cause employment to rise. D. unemployment will work causing the inflation rate to fall.