Which of the following is one reason why the income of small family farms has decreased over time?
A) The demand for farm products is price elastic.
B) The U.S. population has increased greatly since 1950.
C) The demand for farm products is income inelastic.
D) Technology has increased farm productivity and market supply.
A
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Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. What is the opportunity cost of producing coffee in Chile?
a. Half a pound of sugar b. Two-fifth of a pound of sugar c. 2 pounds of sugar d. One-third of a pound of sugar e. 4 pounds of sugar
If K = capital and L = labor, then output per laborer is
a. K/L b. GDP/K c. L/K d. L/GDP e. GDP/L