Tom and Jerry have two tasks to do all day: makedishes and build fences. If Tom spends all day makingdishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day makingdishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. After looking at the production possibilities for both Tom and Jerry, we can conclude that:
A. Tom has the comparative advantage in dish production.
B. Jerry has the comparative advantage in dish production.
C. Tom has the comparative advantage in fence production.
D. No comparative advantage exists.
A. Tom has the comparative advantage in dish production.
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When we apply economic analysis to democracies, it is reasonable to expect government policies to be serving
A) many extremely partial or special interests. B) the interests of business generally. C) the interests of consumers. D) the interests of the majority. E) the interests of the people who most highly value the results of government actions.
Economists define liquidity as
A) the difference between the return on the asset and the return on a long-term U.S. Treasury bond. B) the fraction the asset makes up of an investor's portfolio. C) the ease with which an asset can be exchanged for money. D) the difference between the total demand for an asset and the total supply of the asset.
What is economic growth and why are growth rates so important?
What will be an ideal response?
Economic profits are
A) total revenue minus explicit costs. B) total revenue minus implicit costs. C) total revenue minus explicit and implicit costs. D) total revenue minus accounting costs.