Ashley is an attorney and also an excellent typist. She can type 120 words per minute, but she charges attorney fees at $100 per hour. Benjamin would like some typing work but can only type 60 words per minute. According to the law of comparative advantage, Ashley should hire Benjamin to do her typing if and only if his wage rate is less than
a. $10 per hour.
b. $50 per hour.
c. $60 per hour.
d. $100 per hour.
B
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If the quantity of real GDP demanded is less than the quantity of real GDP supplied, then
A) the economy must be producing at potential GDP. B) the price level falls and firms decrease production. C) the price level falls and firms increase production. D) the price level rises to restore the macroeconomic equilibrium. E) aggregate demand changes to restore the equilibrium.
The decreasing slope of a production function reflects
A) diminishing returns. B) rising unemployment. C) decreasing costs. D) increasing aggregate demand.
Corrective taxes enhance efficiency, but the cost to administer them exceeds the revenue they raise for the government
a. True b. False Indicate whether the statement is true or false
Firms that are involved in more than one type of business could be evidence of an attempt to
a. increase private profit at the expense of consumers. b. internalize some forms of positive externalities. c. reduce the impact of government regulations on their business. d. increase the private marginal cost of production.