Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. If both Amy and Mike produce the good in which they have comparative advantage, the total annual output of this economy will be ________.
A. 10,000 pounds of cheese and 30 cars
B. 10,000 pounds of cheese
C. 5,000 pounds of cheese and 20 cars
D. 30 cars
Answer: C
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A) 6,000 B) 60,000 C) 600,000 D) 6,000,000
An increase in economic rent is accompanied by an increase in the quantity supplied of a resource
a. True b. False Indicate whether the statement is true or false
An increase in nonlabor income leads to
a. a fall in the quantity of labor supplied and in consumption. b. a fall in the quantity of labor supplied but an increase in consumption. c. an increase in the productivity of labor. d. a fall in the wage rate.