Suppose that, given the same number of workers, the United States can produce two times as many TVs or 20 times as many potatoes as Chile. Which of the following statements is true?
A. Chile should trade with the United States for potatoes because the United States has an absolute advantage in the production of potatoes.
B. The United States can benefit from trading TVs but not potatoes with Chile.
C. Chile should trade with the United States for TVs because the United States has an absolute advantage in the production of potatoes.
D. The United States has absolute advantage in producing both goods.
Answer: D
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Unemployment:
A. changes primarily because of macroeconomic forces. B. can have serious social consequences. C. can create uncertainty about the future. D. All of these are true.
Economic models suggest that movie stars have salaries that
a. greatly exceed their marginal contribution to the movie studio's revenue. b. understate their full contribution to the movie studio's revenue-as the celebrities are the main reason that people go to see movies. c. are about equal to their marginal revenue products. d. can only be explained by looking at specific movie stars and their individual salaries.
In economics, activities done for others, such as providing house cleaning or dental work, are referred to as
A) technology. B) physical capital. C) services. D) goods.
Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1
Refer to Table 9.1. If the market price is $42, then for this firm to maximize profits it should produce ________ units of output and its profits will be ________.
A. five; $70 B. six; $70 C. six; $120 D. seven; $58