Question

Which of the following falls during an economic boom?

Investment

Unemployment

GDP

Consumption

Question 4

Which of the following rises during a recession?

Investment

Unemployment

Consumption

GDP

A producer is said to have a comparative advantage in the production of a good when the producer ________ compared to other producers.

has a lower opportunity cost

has a higher sunk cost

can produce more units of the good per hour

charges a higher price for the good

Answer 1

1. Ans: Unemployment

Explanation:

During economic boom , economic activities move in the upward direction. As a result , overall production increases. Producers earn higher profit. So the overall employment increases or unemployment falls.

2.Ans: Unemployment

Explanation:

During recession , economic activities move in the downward direction. As a result , overall production decreases. It leads higher unemployment in the economy.

3.Ans: has a lower opportunity cost

Explanation:

A country will specialize in the production of a good in which it has lower opportunity cost as compared to other country. So a producer is said to have a comparative advantage in the production of a good when the producer has a lower opportunity cost compared to other producers.