Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?
a. Iceland has an absolute advantage, but not a comparative advantage in producing food.
b. Iceland has a comparative advantage, but not an absolute advantage in producing food.
c
Lavaland has both a comparative and absolute advantage in producing clothing.
d. Lavaland has a comparative advantage, but not an absolute advantage in producing clothing.
a
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Which of the following is NOT a function of the federal government?
A) providing public goods and services B) imposing a personal income tax C) making transfers to state and local governments D) making social security and welfare payments E) collecting property taxes
Bob works for a firm that produces umbrellas. He receives payment for his labor. The firm wants to expand but lacks the capital needed for the expansion. Bob, a person of some means, provides the capital. What market(s) are these payments made in?
a. illegal market b. goods and services market c. product market d. resource market e. umbrella market