Suppose a country’s workers can produce 4 watches per hour or 16 rings per hour. If there is no trade
A. the opportunity cost of 1 watch is 4 rings.
B. the opportunity cost of 1 watch is 1/4th of a ring.
C. the opportunity cost of 1 watch is 5 rings.
D. the opportunity cost of 1 watch is 1/5th of a ring.
Answer: A
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Comparative advantage is the ability to
A) perform an activity at a lower opportunity cost. B) determine who your best trading partners are. C) determine the best use of capital goods. D) convince others of the best choices to make in their own self-interest.
The question of how much labor a firm will hire comes down to:
A. whether added workers are going to generate more revenue than what it costs to hire them. B. if the added workers are going to add revenues to the firm. C. whether the value of the marginal product is greater than, less than, or equal to the average total cost. D. the healthcare costs they incur by hiring them.
Figure 14.1 shows three aggregate demand curves. A shift from curve AD2 to curve AD1 could be caused by a(n):
A. increase in the money supply. B. increase in taxes. C. increase in the price level. D. increase in government spending.
A high school student who voluntarily includes a writing sample with their college application is an example of:
A. signaling. B. screening. C. building a reputation. D. statistical discrimination.