Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms Cleaned Per HourMeals Cooked Per HourLou54Alex33Which of the following is true?
A. Lou has both an absolute advantage and a comparative advantage over Alex in both tasks.
B. Alex has both an absolute advantage and a comparative advantage over Lou in both tasks.
C. Alex has a comparative advantage over Lou in cleaning.
D. Lou has a comparative advantage over Alex in cleaning.
Answer: D
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A legal claim against a firm that usually entitles the owner of the claim to receive a fixed annual coupon payment, plus a lump-sum payment at some future date, is known as
A) a bond. B) a share of common stock. C) a share of preferred stock. D) a reinvestment coupon.
Figure 11-6
The profit-maximizing monopolist in Figure 11-6 will produce ____ units of output.
A. Q1 B. Q2 C. Q3 D. Q4
Which of the following statements is correct?
a. Equity is more important than efficiency as a goal of the tax system. b. Efficiency is more important than equity as a goal of the tax system. c. Both equity and efficiency are important goals of the tax system. d. Neither equity nor efficiency is an important goal of the tax system.
High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores. They do this because
a. they are irrational b. their opportunity cost of time is low c. crowded and understaffed discount stores impose higher time costs d. they like to be seen paying more money e. they do not mind wasting time