Refer to Figure 18.1. The United States has a comparative advantage in the production of
A) bicycles. B) hang gliders.
C) both bicycles and hang gliders. D) neither bicycles nor hang gliders.
B
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A tax is efficient if
A) it is based on profits earned and not on wages. B) it imposes a small excess burden relative to the revenue it raises. C) it encourages saving and investment. D) individuals with the lowest incomes pay proportionately lower taxes than individuals with the highest incomes.
Frictional unemployment arises when
A) unskilled or low-skilled workers find it difficult to obtain desirable, long-term jobs. B) labor must be reallocated from industries that are shrinking to areas that are growing. C) workers must search for suitable jobs and firms must search for suitable workers. D) output and employment are below full-employment levels.