In economics, what term refers to using fewer resources than a competitor?
a. absolute advantage
b. comparative advantage
c. market efficiency
d. negative incentive
a. absolute advantage
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A bank allows us to diversify risk because it has a:
A. small amount of borrowers and savers, so it can connect the optimal saver to the best-matched borrower. B. big pool of borrowers and savers, so the risk of repayment is spread among many. C. big pool of borrowers, but not many savers, so it can choose the riskiest person to borrow from. D. small amount of borrowers, but many savers, so it can combine savings to make larger loans.
Cole was discussing the market for cocoa beans with his friend John Schmidt. Cole said, "Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years, the price of cocoa beans has been rising and rising and people are buying
more and more. I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not. What will be an ideal response?
Refer to the below data. If government adopts a price support program that sets the price at $9, then the total amount that government will pay to farmers of this product is:
A. $300
B. $900
C. $1,800
D. $2,000
Our free-rider model of voluntary giving suggests that, when the government subsidizes private giving to charity, it's contribution will simply "crowd out" the private contributions so long as no one is at a corner solution.
Answer the following statement true (T) or false (F)