- Module 4.1: In Italy, an automobile can be produced by 8 workers in one day and...
- Module 4.2: Refer to the story of Tom and Hank illustrated by Figure 4.1 in the...
- Module 4.3: Refer to the graph below to answer the following questions. Use the...
- Module 4.4: Refer to the graph below to answer the following questions. If the ...
- Module 4.5: Refer to the graph below to answer the following questions. What is...
Solutions for Chapter Module 4: Comparative Advantage and Trade
Full solutions for Krugman's Economics for AP* | 2nd Edition
the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party
an excess of government spending over government receipts
fluctuations in economic activity, such as employment and production
the ability to produce a good at a lower opportunity cost than another producer
a decrease in the value of a currency as measured by the amount of foreign currency it can buy
the quantity supplied and the quantity demanded at the equilibrium price
money without intrinsic value that is used as money because of government decree
the one-for-one adjustment of the nominal interest rate to the inflation rate
the study of how people behave in strategic situations
gross domestic product (GDP)
the market value of all final goods and services produced within a country in a given period of time
income elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income
a small incremental adjustment to a plan of action
a firm that is the sole seller of a product without close substitutes
a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms
the production of goods and services valued at current prices
price elasticity of supply
a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price
the theory that people optimally use all the information they have, including information about government policies, when forecasting the future
government policy aimed at protecting people against the risk of adverse events
the percentage of the labor force that is unemployed
value of the marginal product
the marginal product of an input times the price of the output