Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that
A) Beth should produce both goods because she can produce more of both goods in an hour than can Joe.
B) Beth should produce sandwiches and Joe should produce pizza.
C) Beth should produce pizza and Joe should produce sandwiches.
D) Beth should produce both goods and Joe should produce sandwiches.
C
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Which of the following is not true about the U.S. trade balance since 1979?
a. The balance of trade has been in deficit. b. During recessions the balance has usually been flat. c. The balance of trade has been in surplus. d. When the economy expanded, the demand for imports increased. e. When the economy expanded, the trade balance worsened.
Labor productivity, measuring the output per worker
a. increases with increases in technology b. decreases with increases in technology c. increases with increases in capital stock d. is the same as the capital labor ratio e. is the same as the capital output ratio
The term tax incidence refers to
a. whether buyers or sellers of a good are required to send tax payments to the government. b. whether the demand curve or the supply curve shifts when the tax is imposed. c. the distribution of the tax burden between buyers and sellers. d. widespread view that taxes (and death) are the only certainties in life.
Deflation during a recession is of concern to economists because:
A. workers will demand wage increases to offset the effects of deflation. B. it is generally followed by periods of hyperinflation. C. the government is powerless to stop it. D. falling prices lead consumers to delay purchases and further reduce spending.