Suppose an attorney has hired a very well-educated secretary that is not only more productive in filing briefs but also more productive at typing than he is
Can you provide any explanation for why it might still make sense for him to continue filing briefs while the secretary continues to do the typing?
Even though the attorney may be less productive at filing briefs than his own secretary it might be that he is able to do this at a lower opportunity cost than his secretary. On the other hand the secretary's opportunity cost of typing may be less than that of the attorney.
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If a country has
A) an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good. B) an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good. C) a comparative advantage in production of a good, it must also have an absolute advantage in producing that good. D) an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good. E) None of the above answers is correct.
Water is cheap and diamonds are expensive because water has a ________, and diamonds have a ________
A) low total utility; high total utility B) low marginal utility; high marginal utility C) high marginal utility; low marginal utility D) low marginal utility and a low total utility; high marginal utility and a high total utility
If a firm goes out of business because of negative economic profits, its books
A) might indicate a positive accounting profit. B) might indicate that opportunity costs were zero. C) might indicate that taxes are too high. D) might suggest a mistaken value of explicit costs.
Interest rates typically rise when
A) bond prices increase. B) bond prices decrease. C) the coupon payout on existing bonds increase. D) the maturity date on existing bonds extends farther into the future.