What is the key difference between the theory of comparative advantage and the theory of absolute advantage? Which theory do you support? Why?
What will be an ideal response?
Absolute advantage looks at absolute productivity differences while comparative advantage looks at relative productivity differences. The lesson of the theory of comparative advantage is simple but powerful: You are better off specializing in what you do relatively best. Produce (and export) those goods and services you are relatively best able to produce, and buy other goods and services from people who are relatively better at producing them than you are.
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The U.S. Treasury has issued 10-year zero coupon bonds with a face value of $1,000. Assume that coupon payments are normally semiannual. What will be the current market price of these bonds if the opportunity cost for similar investments in the market is 6.75 percent?
A) $684 B) $860 C) $515 D) $604
Norman suffers from nomophobia, and is therefore likely to
A) feel uncomfortable when coworkers refer to his as "Norm." B) feel anxious when he is not using or touching his smartphone. C) forget frequently to bring his smartphone to the office. D) call in sick so he can spend the entire day sending and receiving text messages.