A world-renowned brain surgeon can type twice as fast as her secretarial assistant. Which of the following statements is true in this situation?
a. The secretary has an absolute advantage in typing.
b. The surgeon should do her own typing to save money.
c. The surgeon should fire the assistant and work weekends and evenings to stay up on her typing.
d. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the secretary has a comparative advantage in typing.
e. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the surgeon has a comparative advantage in typing.
d
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The figure above shows the market for tickets to the Super Bowl the day of the game. Suppose the government imposes an entertainment tax of $100 per ticket
a) What is the equilibrium price of a Super Bowl ticket before the tax? What is the price paid by buyers after the tax? What is the price received by sellers after the tax? b) What is the equilibrium quantity of tickets before the tax? What is the equilibrium quantity after the tax? c) Do buyers or sellers bear the largest incidence of the tax?
The demand for a product is likely to be more elastic:
a. the smaller the share of the total budget spent on the product. b. when more complementary products are available. c. in the short run than in the long run. d. when more good substitutes for the product are available.
Some financial institutions are classified as depository institutions based on: a. the way they acquire funds
b. the number of customers they have. c. the number of loans they make. d. the size of the loans they make. e. the amount of reserves they hold.
At the socially optimal equilibrium, _____
a. social cost exceeds private cost b. a market is allocatively efficient c. the marginal private cost of a given level of output is equal to the marginal social benefit d. the marginal private cost of a given level of output is greater than the marginal social benefit