Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does NOT change the oil himself?
A) Tiger Woods has an absolute advantage in changing oil.
B) Tiger Woods has a comparative advantage in changing oil.
C) There is no opportunity cost for the garage mechanic to change oil.
D) The opportunity cost of changing oil is higher for Tiger Woods than for the garage mechanic.
Answer: D
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During the 2007-2009 financial crisis, many households found themselves with negative wealth (debts to repay) and a binding borrowing constraint. Describe the income and substitution effects of a decrease in the real interest rate
What will be an ideal response?
The Trend Projection approach to forecasting is represented by
A) time-series regressions. B) exponential smoothing. C) opinion polls. D) All of the above
The funds used to purchase capital goods are called
A) investment. B) savings. C) financial capital. D) dividends and interest.
Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of Harmony: When P = $3, Qd = 100; at P = $5, Qd = 75; and when P = $7, Qd = 50. This year the village population has increased by 25%. What impact is this most
likely to have? A) Each individual's demand for DVD rentals will increase. B) Each individual's demand curve for DVD rentals will shift to the left. C) The market demand curve for DVD rentals shifts left. D) The market demand for DVD rentals increases.