If Spain is capable of producing either tapas or soccer balls or some combination of those two products, then Spain should:
A. produce the good it has an absolute advantage in producing.
B. produce the good it has a comparative advantage in producing.
C. remain self-sufficient if it can produce both efficiently.
D. trade only if it possesses the absolute advantage in the production of both goods.
B. produce the good it has a comparative advantage in producing.
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A consumer expenditure survey reports the following information on entertainment spending: 20082009 PriceQuantityPriceQuantityMovies$75$87Concerts$302$352CDs$167$1510 Using 2008 as the base year, by how much does a "cost of entertainment" index increase between 2008 and 2009?
A. 13.4 percent B. 8.6 percent C. 3.9 percent D. 29.4 percent
Which of the following statements best describes the concentration movement between 1875-1905?
a. There were two phases, the first of which had relatively more horizontal mergers and the second had relatively more vertical mergers. b. The first phase focused on vertical mergers, the second was a period of relative inactivity in acquisitions, and the third decade was one of horizontal mergers. c. There were three phases, the first of which had relatively more vertical mergers and the second had relatively more horizontal mergers. d. There were two waves of mergers. In the first wave most mergers were motivated by the desire to obtain monopoly profits and the second wave was obtained through greater economies of scale.
If a good is inferior in an economic sense:
a. it is demand price elastic. b. it is demand price inelastic. c. the income elasticity of demand is negative. d. it is a low-quality good. e. it is not the highest quality good in its class.
Refer to Scenario 9.3 below to answer the question(s) that follow. SCENARIO 9.3: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $5 on average per meal. Refer to Scenario 9.3. Economic profit per week is
A. ?$400. B. $0. C. $600. D. $900.