An economy has two workers, Jen and Rich. Everyday they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.
A. TVs; TVs
B. radios; both goods
C. radios; TVs
D. TVs; radios
Answer: C
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Decision making that seeks only solutions that are acceptable is called
a. optimizing. b. satisficing. c. benchmarking. d. maximizing.
The supply of both physical and human resources in the long run is determined primarily by
a. the presence or absence of economies of scale. b. investment choices and resource depreciation. c. sunk costs; what happens in the present cannot change the future. d. the law of diminishing marginal returns.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are:
A. Complementary goods B. Substitute goods C. Inferior goods D. Normal goods