Economics - Study Mode
[#381] Who stated explicitly for the first time, the Law of Comparative Costs?
Correct Answer
(A) David Ricardo
Explanation
Solution: David Ricardo stated explicitly for the first time, the Law of Comparative Costs. Absolute advantage refers to the uncontested superiority of a country to produce a particular good better. Comparative advantage introduces opportunity cost as a factor for analysis in choosing between different options for production.
[#382] Demand curve slopes downward because of the law of
Correct Answer
(D) Diminishing marginal utility
Explanation
Solution: Demand curve slopes downward because of the law of Diminishing marginal utility. The law of diminishing marginal utility states that with each increasing quantity of the commodity, its marginal utility declines.
[#383] The long run is a
Correct Answer
(B) Period long enough to allow firms to change plant size and capacity
Explanation
Solution: The period is long enough to allow firms to change plant size and capacity. The long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs.
[#384] The Purchasing Power Parity Theory' came into prominence in 1916 through the writings of
Correct Answer
(C) Gustav Cassel
Explanation
Solution: The Purchasing Power Parity Theory' came into prominence in 1916 through the writings of Gustav Cassel.
[#385] Which one of the following is represented by a rectangular hyperbola?
Correct Answer
(A) Average fixed cost curve