Recall from the text when Amar Bazazz discovered that very little of the actual gold deposits were ever taken from his cave, he inadvertently discovered the concept of

Answer the following questions true (T) or false (F)

1. For a person to have a comparative advantage in producing a product, she must be able to produce that product at a lower opportunity cost than her competitors. 2. It is possible to have a comparative advantage in producing a good or service without having an absolute advantage. 3. If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns.

Refer to the market for loanable funds, as shown in the above graph. Suppose investors who borrow money in the loanable funds market become quite nervous and pessimistic about the economy in general, and expected returns on investments in particular. We would expect to see a(n):

A. Lower equilibrium interest rate

B. Rightward shift of the supply curve

C. Rightward shift of the demand curve

D. Increase in the equilibrium quantity of loanable funds