For each surfboard that Australia produces, it gives up the opportunity to make 25 boomerangs. New Zealand can produce 1 surfboard for every 15 boomerangs it produces
Which of the following is true about the comparative advantage between the two countries?
A) Australia has the comparative advantage in producing surfboards.
B) New Zealand has the comparative advantage in producing surfboards and boomerangs.
C) Australia has the comparative advantage in producing boomerangs.
D) New Zealand has the comparative advantage in producing boomerangs.
C
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Refer to the scenario above. Using 2012 as the base year, what is the real GDP of the economy in 2013?
A) $49,500 B) $55,000 C) $47,000 D) $56,000
Which of the following generalizations about the benefit of a subsidy is correct?
a. The more inelastic the supply of a product, the larger the portion of the benefit will be to buyers. b. The more inelastic the demand for a product, the larger the portion of the benefit will be to buyers. c. The more elastic the supply of a product, the smaller the portion of the benefit will be to buyers. d. The distribution of the benefit of a subsidy is not affected by the elasticity of the supply and demand for the product for which the subsidy is granted.