Refer to Table 2-20. Does either Japan or Thailand have an absolute advantage and if so, in what product?
A) Thailand has an absolute advantage in rice.
B) Japan has an absolute advantage in rice.
C) Japan has an absolute advantage in wristwatches.
D) Thailand has an absolute advantage in both products.
D
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In the circular flow, how are the "value of production," "income," and "expenditures" related?
A) They have no relationship to each other. B) Once tax payments are subtracted at each stage, they are equal. C) Expenditures on GDP equals the value of production which equals income. D) Once net exports of goods and services are subtracted from GDP, all three are equal. E) Value of production always equals income, but expenditures is smaller because households save some of their income and do not spend it.
Provide an example of each allocation method that illustrates when it works well
What will be an ideal response?