If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who
What will be an ideal response?
have a comparative advantage in the productive activity.
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John wants to buy a new lawn mower. He can either buy it in the US and pay $500 or buy it in Mexico and pay 6188 Mexican Pesos. At the exchange rate of 1 Mexican Peso=0.771US$, ignoring any other costs, he would
a. Prefer buying in the US b. Prefer buying in Mexico c. Be indifferent about where he buys his television d. None of the above
Gross domestic product is the sum of the purchase price multiplied by the quantity of:
a. goods and services exchanged during the period. b. final goods and services produced domestically during the period. c. goods and services produced domestically during the period minus the depreciation of productive assets. d. final goods and services plus intermediate goods produced domestically during the period.
Supporters of minimum-wage legislation argue that:
A. workers deserve a basic standard of living. B. it would not be fair for firms to pay a wage that would leave workers struggling to escape poverty. C. a worker earning minimum wage should be able to live above the poverty line. D. All of these are true.
Which of the following is a progressive tax?
A. The Social Security tax. B. The federal income tax. C. Local property taxes. D. Local sales taxes.