Chapter 2 Q&A - Refer to the information provided in...

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Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1   6)  2
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Refer to  Table 2.1. Which of the following statements is  true A) 
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Isabel has a  comparative advantage in both composing music and writing song lyrics.  B) 
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Cris has a  comparative advantage in both composing music and writing song lyrics.  C) 
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Isabel has a  comparative  advantage in composing music and Cris has a comparative advantage in writing song lyrics.  D) 
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Cris has a  comparative  advantage in composing music and Isabel has a comparative advantage in writing song lyrics.  Answer:  
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D 7) 
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Saving is  an example of:  A) 
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exchanging  capital for cash.  B) 
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exchanging  scarce resources for unlimited resources.  C) 
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trading present  benefits for future benefits.  D) 
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trading future  benefits for present benefits.  Answer:  
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8) 
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Because resources are not equally well suited to producing all goods: 
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Unformatted text preview: A) as more of a good is produced the inputs used to produce that good will increase in price. B) the opportunity costs of producing a good will increase as more of that good is produced. C) the opportunity costs of producing a good will decrease as more of that good is produced. D) as more of a good is produced the quality of that good declines and therefore the costs of production increase. Answer: B 9) The gap between rich and poor countries has __________ over time because poor countries find it difficult to devote resources to __________ production. A) increased; capital B) decreased; capital C) remained constant; capital D) remained constant; capital and consumer goods Answer: A...
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