Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles.
India: 3 bushels of wheat or 12 yards of textiles.
From the data, the USA:
a. has an absolute advantage over India in the production of textiles.
b. has an absolute advantage over India in the production of wheat.
c. has a comparative advantage in the production of textiles.
d. should export textiles to India.
b. has an absolute advantage over India in the production of wheat.
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When the government prevents prices from adjusting naturally to supply and demand,
a. it equates the amount buyers want to buy with the amount sellers want to sell. b. it adversely affects the allocation of resources. c. it improves equality and efficiency. d. it improves efficiency but reduces equality.
The price elasticity of demand shows
A) the relationship between market price and household income. B) the proportionate amount by which the quantity demanded changes in response to a proportionate change in price. C) the quantity demanded at a given price. D) the proportionate amount by which the price changes in response to a proportionate change in quantity demanded.