"Now that Blake paints the broad surfaces and I do the trim work, we can paint a house in three-fourths the time that it took for each of us to do both." This statement most clearly reflects
a. the importance of secondary effects.
b. the fallacy of composition.
c. the law of comparative advantage.
d. behavior inconsistent with economizing.
c. the law of comparative advantage.
You might also like to view...
Refer to Figure 5-1. At the efficient equilibrium,
A) economic surplus is minimized. B) economic surplus is maximized. C) economic surplus is zero. D) economic surplus is negative.
If the long-run aggregate supply curve is vertical
A) the short-run Phillips curve must be vertical. B) the economy stays at the natural rate of inflation in the long run. C) the trade-off between unemployment and inflation cannot be permanent. D) unemployment and inflation are positively related in the long run.
If a monopolistically competitive firm's demand curve is shifting left, it will stop shifting only when:
A. the firm raises its price. B. firms stop leaving the industry. C. the firm lowers its price. D. firms stop entering the industry.
Transaction costs are
A) the costs associated with making a transaction that is required by the government. B) not true costs since they are often not paid. C) the costs associated with exchanges in the service area. D) the costs associated with making, reaching and enforcing agreements.