Which of the following contribute to increases in productivity?
a. incentives for innovation
b. more physical capital
c. an improved education system
d. all of the above
d
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Someone who has the desire to work but has no exceptional abilities and has not acquired the skills necessary for a well-paying job is likely to escape poverty completely
a. True b. False Indicate whether the statement is true or false
If 1 bottle of wine costs 4 loaves of bread in England, then 1 loaf of bread must cost 1/4 bottle of wine. For England to specialize in bread production, England must be a more efficient bread producer than Portugal, which means that England's cost of producing bread must be less than Portugal's cost. Thus if producing 1 loaf of bread in Portugal costs more than 1/4 bottle of wine (or, equivalently, if producing 1 bottle of wine in Portugal costs less than 4 loaves of bread), then England will specialize in bread production and Portugal will specialize in wine production.
(i) What is the cost of growing a bushel of wheat in each state? What is the cost of growing a bushel of corn in each state? (ii) Suppose each state is self-sufficient and there is no trade. If each state chooses to produce equal amounts of the two crops, how much wheat and corn will each state produce? (iii) If the two states begin to trade, with each specializing in its area of comparative advantage, which state will produce wheat and which state will produce corn? How will the total production between the two states compare to the situation where each was self-sufficient?