Suppose it takes Paul 3 hours to bake a cake and 2 hours to mow the lawn, and suppose it takes Tom 2 hours to bake a cake and 1 hour to mow the lawn. Which of the following statements is correct?
A. Paul has the comparative advantage in mowing the lawn.
B. Paul has the absolute advantage in mowing the lawn.
C. Paul has the comparative advantage in baking cakes.
D. Paul has the absolute advantage in baking cakes.
Answer: C
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If Pat can produce a good or service at a lower opportunity cost than Chris can, then
a. Pat has a comparative advantage in producing the good or service b. no gains are possible through specialization c. Pat must have an absolute advantage in producing the good or service d. Pat must be more talented than Chris e. society is at a point along its production possibilities frontier
Command and control regulations do which of the following?
a. Provide incentives for firms to invent new technology to clean up pollution. b. Dictate what firms can produced and how much of a good they can produce. c. Dictate the amount of pollution firms allowed to production and/or the type of technology that must be used by the firm. d. Provide greater flexibility for each firm to lower the pollution it creates in its own way.
Describe how an accounting firm could experience economies of scale
Collective bargaining
A. deals only with issues relating to wages. B. substitutes one labor negotiator for many independent workers. C. is NOT a function of labor unions. D. is illegal in the United States.