If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:
A. Les has a comparative advantage in producing pants.
B. Les has an absolute advantage in producing pants.
C. Les has both comparative and absolute advantage in producing pants.
D. Eva has a comparative advantage in producing pants.
Answer: B
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Max Shreck, an accountant, quit his $80,000-a-year job and bought an existing tattoo parlor from its previous owner, Sylvia Sidney. The lease has five years remaining and requires a monthly payment of $4,000. The lease
A) is a variable cost of operating the tattoo parlor. B) is an implicit cost of operating the tattoo parlor. C) is a fixed cost of operating the tattoo parlor. D) is part of the marginal cost of operating the tattoo parlor.
The difference between the maximum amount a person is willing to pay for a given quantity of a good and the amount actually paid for that quantity is called the
a. producer surplus b. substitution effect c. price discrimination d. income effect e. consumer surplus
In feudalism, serfdom was maintained primarily through:
A. market forces. B. supply and demand. C. tradition. D. economic forces.
A dedicated professor loves being in the classroom and would teach for $70,000 per year, but he is actually paid $80,000 per year. This individual
A) receives economic rent of $150,000. B) has an opportunity cost of $80,000. C) has an opportunity cost of $70,000. D) receives economic rent of $10,000.