"When a person has an absolute advantage in producing a good, the person necessarily has a lower opportunity cost of producing it." Is this assertion true or false?
What will be an ideal response?
The assertion is incorrect. An absolute advantage is when a person can produce more of the good than someone else. A comparative advantage relies on a comparison of opportunity costs, so a person has a comparative advantage in producing a good if the person can produce the good at a lower opportunity cost.
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In the expansion phase of a business cycle
A. the inflation rate and productive capacity decrease. B. employment increases, but output decreases. C. the inflation rate decreases, but productive capacity increases. D. employment and output increase.
Based on Figure 6.1, given a tariff of $0.25 per bushel on soybean imports, how much will domestic production increase?
A) Domestic firms will increase output by 10 million bushels. B) Domestic firms will increase output by 20 million bushels. C) Domestic firms will increase output by 70 million bushels. D) Domestic firms' production will not be changed by the tariff.
State and local governments spend more on the purchases of goods and services than the federal government
Indicate whether the statement is true or false
Jessica's marginal cost for producing a pitcher of lemonade is $0.25. Therefore, $0.25 is her:
A. equilibrium price. B. marginal revenue. C. producers surplus. D. reservation price.