Which of the following is true if a nation does not have an absolute advantage in producing any goods or service?
a) it cannot have a comparative advantage either
b) it will have a comparative advantage in the production of the good or device in which it has a lower opportunity cost
c) it will export raw materials and import finished products
d) no country will want to trade with this nation because it is not cost effective to do so
e) the international value of its currency will be fixed
Ans: b) it will have a comparative advantage in the production of the good or device in which it has a lower opportunity cost
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The measurement of GDP includes
A) nonmarket goods such as homemaking and child-rearing. B) the benefits of clean air and water. C) estimated values of activity in the underground economy. D) purchases and sales of goods produced in previous periods.
Which of the following is associated with relatively elastic demand?
a. Few substitutes; large portion of income; short time span b. Many substitutes; large portion of income; long time span c. Few substitutes; small portion of income; short time span d. Many substitutes; small portion of income; long time span