Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. If Jerry decides to specialize in building fences, what are the limits to his terms of trade?
A. Jerry will accept no less than 7 fences for each dishes.
B. Jerry will accept no less than 7 dishes for each fence.
C. Jerry will accept no less than 2 dishes for each fence.
D. Jerry will accept no less than 2 fences for each dishes.
Answer: C
You might also like to view...
Under competitive conditions, market prices
a. generally convey little information about the value and cost of goods. b. do not usually have much of an effect on the decisions of individuals. c. are incapable of coordinating the actions of buyers and sellers. d. generally bring the self-interest of individuals into harmony with the general welfare.
A reason that economists keep an eye on both M2 and M1 is because:
A. M2 is more accurate than M1. B. both fluctuate widely and frequently in total dollar value. C. money market accounts are sometimes used like checking accounts and sometimes used like savings accounts. D. during a recession, M1 is meaningless.
A good that has social costs that are equal to private costs has a price that is
A) too high. B) too low. C) just right. D) equal to marginal cost.
For a perfectly competitive firm, any price below its minimum AVC is a
A. negative price. B. market price. C. shutdown price. D. profit maximizing price.