Figure 34-2
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In Figure 34-2,
A. the opportunity cost of 1 unit of wheat in the United States is a 2/3 unit of petroleum.
B. the opportunity cost of 1 unit of wheat in Mexico is a 2/3 unit of petroleum.
C. the opportunity cost of wheat is higher in the United States than it is in Mexico.
D. the United States has a comparative advantage over Mexico in the production of petroleum.
Answer: A
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Which of the following is an example of a compensating wage differential?
A) Workers in a dynamite mine receive higher wages than if they worked in other jobs that require the same level of skills. B) Nurse anesthetists are paid less than anesthesiologists (who have medical degrees). C) In the market for lawyers, top graduates from the top programs earn starting salaries that are significantly higher than the starting salaries earned by lower-ranked graduates from the lower-ranked programs. D) Popular movie stars like George Clooney command much higher salaries than other talented but lesser-known actors.
One of the reasons macroeconomists have concerns about inflation is that inflation causes
A) real GDP to rise. B) nominal GDP to fall. C) wages to rise as fast as prices. D) real GDP to exceed nominal GDP. E) none of the above