The principle of comparative advantage states that
a. whoever has a comparative advantage in producing a good or service also has the absolute advantage
b. whoever has an absolute advantage in producing a good or service also has the comparative advantage
c. whoever can produce a good or service using fewer resources than another individual has the comparative advantage
d. total production of every good or service can be greater if individuals specialize according to their comparative advantage
e. comparative advantage is maximized if each individual specializes according to his or her absolute advantage
D
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In the permanent-income hypothesis incorporating rational expectations, the actual cyclical pattern of consumption in the United States is too ________ to justify the assumption that a current change in income ________
A) smooth, is a poor guide to future income changes B) volatile, is a poor guide to future income changes C) smooth, leads to a gradual change in permanent income D) volatile, leads to a gradual change in permanent income
Positive economic statements are usually easier to refute with data than normative economic statements are
a. True b. False