Question

1. As more people rely on a travel app to book reservations, the quality of the app improves, encouraging more people to use the app. This type of network is best described as a _____ network.

a. virtual

b. external

c. internal

d. physical

2. Assume that the United States could produce 80 million loaves of bread if all its resources were devoted to bread production. If the United States used all its resources to produce milk, suppose it could produce 80 million gallons of milk. If Germany used all its resources to produce bread, suppose it could produce 40 million loaves of bread. Alternatively, if all its resources were used to produce milk, Germany could produce 20 million gallons of milk. Which of the following statements then is true?

a.The United States has an absolute advantage in producing both goods.

b. Germany has a comparative advantage in producing milk.

c. The United States has a comparative advantage in producing both goods.

d. The United States has a comparative advantage in producing bread.

3. If the poverty threshold for a household of 3 persons is $20,000 and the Shermans earn $22,000, they would be classified as:

	near poor.
	not poor.
	severely poor.
	poor.

4. Which occurrence would increase average household income?

	increased experience of workers
	increase in the unemployment rate
	aging of the population
	increased immigration

Answer 1

a) The above travel app is an example of a Virtual network. The answer is "A".

b) The true statements are

• The United States has an absolute advantage in producing both goods. All the other statements are wrong, as the US has a comparative advantage in the production of Milk and Germany has a comparative advantage in the production of Bread.

c) "A", The Shermans would be classified as near poor. Near poor is defined as people who live in 100% to 125% of the poverty line i.e. 20,000 to 25,000. Shermans are at 22,000.

d) "A"

An increased experience will increase the productivity and lead to an increased income of the household.