If the government required car makers to install more costly and effective emission control devices on cars, it will lead to:
a. a higher price of cars and a larger quantity of cars sold.
b. a higher price of cars and a smaller quantity of cars sold.
c. a lower price of cars and a larger quantity of cars sold.
d. a lower price of cars and a smaller quantity of cars sold.
Question 2
Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following is true?
a. Adam has an absolute advantage in oranges and a comparative advantage in apples.
b. Karl has an absolute advantage in oranges and a comparative advantage in oranges.
c. Karl has an absolute advantage in both apples and oranges.
d. Karl has an absolute advantage and a comparative advantage in apples.
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