Tom and Jerry have two tasks to do all day: makedishes and build fences. If Tom spends all day makingdishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day makingdishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. After looking at the production possibilities for both Tom and Jerry, we can conclude that:
A. Tom has the comparative advantage in dish production.
B. Jerry has the comparative advantage in dish production.
C. Tom has the comparative advantage in fence production.
D. No comparative advantage exists.
A. Tom has the comparative advantage in dish production.
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If the Fed has announced that it plans on lowering the interest rate it will
A) engage in contractionary open market operations, thereby increasing the money supply. B) engage in contractionary open market operations, thereby decreasing the money supply. C) engage in expansionary open market operations, thereby decreasing the money supply. D) engage in expansionary open market operations, thereby increasing the money supply.
If the equilibrium exchange rate of the dollar is 1.10 euros per dollar and currently the exchange rate is 0.90 euros per dollar, then there is a ________ of dollars that leads to ________
A) surplus; the supply curve of dollars shifting leftward B) shortage; a rise in the exchange rate C) surplus; a rise in the exchange rate D) shortage; the supply curve of dollars shifting rightward E) shortage; the demand curve for dollars shifting rightward