Question

8)   One way to sidestep the debate over whether the government should increase spending during economic downturns is to:
A)   return to the gold standard so that the value of the U.S. dollar remains strong.
B)   identify projects that nearly everyone can agree the government should fund.
C)   cut government spending so the government has no ability to spend money.
D)   raise taxes so that the government has the money it needs for additional spending.

9)   If Al has an absolute advantage over Beth in preparing meals, then:
A)   Al can prepare more meals in a given time period than Beth.
B)   Al's opportunity cost of preparing a meal is lower than is Beth's.
C)   the problem of scarcity applies to Beth but not to AL
D)   it takes Al more time to prepare a meal than Beth.

10)   If you have a comparative advantage in a particular task, then:
A)   you give up more to accomplish that task than do others.
B)   you give up less to accomplish that task than do others.
C)   you have specialized in that task, while others have not.
D)   you are better at it than other people.

11)   Which of the following statements is true?
A)   Comparative advantage requires absolute advantage.
B)   Absolute advantage implies comparative advantage.
C)   Absolute advantage requires comparative advantage.
D)   Comparative advantage does not require absolute advantage.

Answer 1

8.

Correct Answer:

B

It is the approach to prevent the debate and conflict taking place between different parties. It will help build consensus about those projects that can bring development, prosperity and social welfare and everyone can agree about it.

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9.

Correct Answer:

A

Al, having an absolute advantage in making meals, means that Al can use time more efficiently than Beth to prepare meals.

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10.

Correct Answer:

B

Comparative advantage is derived due to the relatively lower opportunity cost than that of others.

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11.

Correct Answer:

D

Comparative advantage is derived on the basis of lower opportunity cost than others. It does not need to have absolute advantage also, to own a  comparative advantage.