Explain absolute advantage
What will be an ideal response?
Absolute advantage is the advantage in the production of a product enjoyed by one country over another when it uses fewer resources to produce that product than the other country does.
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What are some of the issues associated with the consumer price index?
What will be an ideal response?
GDP tends to ________.
A. overstate economic welfare, because it does not include certain nonmarket activities such as the productive work of housewives B. understate economic welfare, because it does not take into account increases in leisure C. understate economic welfare, because it includes expenditures undertaken to offset or correct pollution D. overstate economic welfare, because it does not reflect improvements in product quality