If a nation starts out with very little capital
A. it is doomed to eternal poverty because it will not be able to divert productive resources from producing consumer goods to producing capital goods.
B. it can quite easily divert some resources from producing consumer goods to producing capital goods.
C. if it possesses a valuable commodity that the industrial world wants such as oil, it can sell its oil in exchange for plant and equipment and thus industrialize.
D. None of the choices are true.
C. if it possesses a valuable commodity that the industrial world wants such as oil, it can sell its oil in exchange for plant and equipment and thus industrialize.
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If the additional revenue from hiring an additional worker equals the additional costs from hiring the extra worker, then we know that
A) MFC = MPPL. B) MFC/MPPL = wage. C) MFC/MRPL = 1. D) MRPL/P = MFC.
Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Which of the following statements is correct?
a. Bill has both an absolute advantage and a comparative advantage in cooking dinner. b. Bill has both an absolute advantage and a comparative advantage in mowing the lawn. c. Eileen has both an absolute advantage and a comparative advantage in cooking dinner. d. Eileen has both an absolute advantage and a comparative advantage in mowing the lawn. e. Bill has the comparative advantage in both cooking dinner and mowing the lawn.