6. Which of the an hling ofdls vn A)A fishery\'s stock of fish becomes depleted

Question

6. Which of the an hling ofdls vn A)A fishery's stock of fish becomes depleted due to overfishing as boats fromd converge an agnartment building that povides much-neoded bouing ls buils on he site of only C) A Viet playground for children in that town namese farmer grows rice; an exporter ships it to the United States, and grocer in New York sells it to a customer D) A govemment regulates a firm to clean up the pollutants the firm has released a part of its production process 7. Which of the following is typically a result of the division of knowledge? A) Labor productivity is higher. B) The society runs with the knowledge of a few persons C) No one specializes in any activity D) Each person has the same knowledge as everyone else. 8. Which of the following best describes the principle of comparative advantage? A) To produce more of one good, people have to produce less of another good B) Someone has the ability to produce the same good for the lowest opportunity cost. C) Some people can produce the same good better than other producers can. D) Someone has the ability to produce the same good using fewer inputs than another producer 9. Martha Stewart can iron 20 shirts per hour. Her housekeeper can iron 12 shirts From this information alone, we can infer that: A) Martha has an absolute advantage in ironing. B) Martha has a comparative advantage in ironing. C) the housekeeper has an absolute advantage in ironing. D) the housekeeper has a comparative advantage in ironing. Use the following to answer question 10: Table: Production in France and Italy Labor units required to produce France Italy One Pair of Wool Socks One Bag of Trumes 2

Explanation / Answer

Question 6

"Invisible hand" as stated by Adam Smith refers to the unobservable market force that tends to link demand and supply of a good without any external intervention.

A Vietnamese farmer grow rice; an exporter ships it to the United States, and a grocer in New York sell it to a customer.

Thus, profit opportunity acting as invisible hand is linking the Vietnamese farmer with New York customer.

Hence, the correct answer is the option (C).

Question 8

The principle of comparative advantage implies that an individual or a firm or a country is said to have comparative advantage in production of a good if it can produce such good at lowest opportunity cost relative to the other producers of such good.

So,

Someone has the ability to produce the same good for the lowest opportunity cost best describes the principle of comparative advantage.

Hence, the correct answer is the option (B).

Question 9

When using same quantity of resources, a person is able to produce more good than others then he or she is said to have absolute advantage in production of such good.

In one hour, Martha can iron more shirts than her housekeeper.

So,

Martha has an absolute advantage in ironing.

Hence, the correct answer is the option (A).

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