Bonnie can produce either 10 hats or 20 scarves in a month. Phil can produce either 5 hats or 10 scarves in a month. Therefore:
A) Phil has a comparative advantage in hats, Bonnie in scarves.
B) Bonnie has a comparative advantage in hats, Phil in scarves.
C) Phil has a comparative advantage in both hats and scarves.
D) Bonnie has a comparative advantage in both hats and scarves.
E) Neither of them has a comparative advantage in hats or scarves.
E
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"Coffee Prices Sink As Demand Falls." The newspaper heading
A) assumes the law of demand does not hold. B) confuses demand with quantity demanded. C) misunderstands the role of supply in price formation. D) reverses the actual relationship between price and demand. E) uses the concept of demand correctly.
The government of an economy must borrow money from the loanable funds market if the value of:
a. government expenditures is lower than the value of net taxes. b. government expenditures is higher than the value of net taxes. c. consumption expenditures is lower than the value of net taxes. d. investment expenditures is lower than the value of savings.
What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?
A) output effect = $1.50; price effect = $2.00
B) output effect = $5.50; price effect = -$2.00
C) output effect = $3.00; price effect = $0.50
D) output effect = $4.00; price effect = -$0.50
Most individual's income peaks when they are about
A) 25. B) 40. C) 50. D) 65.