(Consider This) Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that:
A. there is no reason for them to trade services.
B. Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at accounting services.
C. Madison should trade her accounting services for Mason's painting services, so long as
Madison is relatively more efficient at painting.
D. Madison has the comparative advantage in both services.
B. Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at accounting services.
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Which policy tool allows the Federal Reserve the greatest control over monetary policy?
A) the reserve requirement B) open market operations C) lender of last resort D) the discount rate
If the supply curve for a product is horizontal, then the elasticity of supply is: a. equal to zero
b. equal to one. c. greater than one but less than infinity. d. equal to infinity.
If we want to gauge how much the income tax system distorts incentives, we should use the
a. average tax rate. b. ability-to-pay principle. c. total tax revenue collected. d. marginal tax rate.
You observed last week that the price of organic tomatoes in Ames was $4 per pound and that the total quantity of organic tomatoes consumed in Ames was 50 pounds. This week, you observe the price of organic tomatoes increased to $5 per pound and consumption decreased to 30 pounds. What is the elasticity of demand for organic tomatoes?
A. -2 B. -1.6 C. -1 D. -0.625