Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs.. Given this, we know that
a. Ken has an absolute advantage in chairs.
b. Ken has a comparative advantage in tables.
c. Traci has an absolute advantage in chairs.
d. Traci has a comparative advantage in chairs.
c
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When a bank receives deposits,
A) it must hold the entire amount as reserves in case of withdrawal. B) the Fed requires it to hold only a small percentage as reserves. C) it and it alone decides how much it will hold as reserves. D) its liabilities increase in amount but its assets do not change. E) its assets increase in amount but its liabilities do not change.
The difference between the effect of an import quota when quota rights are given away and the effect of a tariff is that
a. only the tariff results in a higher domestic price b. only the quota decreases the amount of goods imported c. the decrease in producer surplus is smaller with the quota d. under a quota, part of the decrease in consumer surplus is redistributed to foreign producers; under a tariff, it is redistributed to the domestic government e. under a tariff, part of the decrease in consumer surplus is redistributed to foreign producers; under a quota, it is redistributed to the domestic government
The marginal rate of substitution is measured along
A. a given indifference curve. B. the demand curve. C. the total utility curve. D. a given budget line.
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $700; AVC = $500; MC = $600; MR = $600. The firm should
A. increase output. B. decrease output. C. shut down. D. continue to produce its current output.